XLK, the Select Sector Spider for Technology was trading at 36.32 earlier today when a customer bought 80,000 of the Mar 37 calls paying up to .07 most likely tied to a small amount of stock.? This appears to be in addition to the open interest of 130,000 on that line.? This is the most active strike.? With IV higher today and the stock off a touch, it could be a part of protection against a large short position or it could be a trader that thinks the next leg up in the S&P will be led by the technology companies that have been the laggard in the recent move up.
While it is tough to tell if the trade is bullish or bearish it is certainly bullish volatility.? Traders looking to piggy back this trade will have to decide whether this is a hedge or a bullish bet.? Alternatively, the April 36/37 strangle for .80 is relatively inexpensive at a volatility of about 12.50%.