Some of today’s unusual options activity included GE, XLU, and XLF

Opening Call Sale in Select Sector Financial Slct Str SPDR Fd (XLF)

unusual options activity: calls trade in XLF

XLF was trading 22.56 a customer sold 32,000 of the September 23 calls at .18 in what appears to be opening.? This was done electronically.? This is likely a trade against an existing long position creating a covered call.

The trader is betting that XLF is likely to be stable or to slowly rise between now and September expiration.? This trade should be considered mildly bullish the underlying and bearish XLF volatility.? This would also reflect on its internal stocks, which would point toward low volatilities for many of the financials.


Getting Long the Underlying in Utilities SPDR (XLU)?

unusual options activity in XLU

I trader sold 20,000 of the XLU Sep 39 puts at .11. By selling the Sep 39 put the customer is making a bet that the underlying will be trading above 39 at September expiration. If that is the case he or she would keep the 220,000 dollars collected on the sale.

It also may be a level that the trader is attempting to get long the stock.? At 39 dollars the div yield on XLU is favorable.? If XLU is below 39.00 the trader would be obligated to take delivery on the stock or have to buy the puts back at would likely be a loss.? My guess is he or she would not mind delivery.

Traders looking to piggy back could look at the Sep 40 puts for a bit more premium.

Put Roll in GE


Today saw a short calendar spread trade that was likely something else.? A customer likely executed a put roll.? A customer that was short the August 26 puts, likely for income bought the puts back 12,000 times paying .10 at the same time the customer sold the Sep 26 puts at .56.?

The customer was likely short at a higher price than .1 on the August thus closing those for a profit, then he or she executed the same put sale in Sep, likely in an attempt to produce income.? Based on the close and roll it is unlikely this customer has an appetite to own 1.2 million shares of GE, thus the customer is with the stock trading here actually bullish. So if GE drops look for a roll down.?

Traders looking to piggy back could consider the 25 puts at .25.

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