Paper bought 10,000 XRT April 41 puts & sold 20,000 of the April 39 puts for a credit of .05.
The SPDR S&P Retail ETF, trading 42.50 with IV30 of 24.90 and HV10 of 24.70, saw a large put 1 by 2 trade. The ETF, with ADV of 18,000 and open interest of 196,000 contracts, saw a customer buy 10,000 of the XRT April 41 puts for 1.17 and against it he or she sold 20,000 of the April 39 puts at .61.? Net, the customer did the 41/39 1 by 2 put spread for a credit of .05.
The customer is thinking that XRT might drop lower between now and April expiration.? If the stock drops slowly toward 39 the customer could potentially do extremely well.? If the stock rallies the customer would keep the credit.? Worst case scenario is a large drop.? This could be an outright play, but is more likely a hedge against a long stock position.? It provides a downside hedge down over 10%.
This trade should be considered bearish the bearish volatility in XRT and mildly bearish the underlying