40,000 XLI Sep 44 puts were bought for 1.80 & 40,000 XLI Sep 30 puts were sold for .34
The Industrial Select Sector SPDR, trading 49.94 (up .32) with an IV30 of 25.75 and an HV10 of 25.06, saw a large put spread trade.? The ETF with an open interest of 178,000 and an ADV of 20,000 contracts saw a customer buy 40,000 put spreads.? The customer bought 40,000 of the September 44 puts paying 1.80 and sold 40,000 of the September 30 puts at .34, net the customer paid 1.46 for the Sep 44/30 put spread.?
This trade based on duration, strike selection, and price is likely a hedge against a large long position in XLI.? The customer is looking for protection from a large drop in the ETF but appears to believe the ETF will not go into the 20s as the hedge stops working below 30.
This trade should be considered bearish the underlying and bullish volatility.