A Note about Today’s ETF Options Volume Surge

| September 15, 2011 | 0 Comments More

Trading is very heavy in the ETF market as the options expiration, ex-div trading and morning put selling have conspired to drive volume higher. 9.2 million calls and 4.2 million puts traded across all products today. SPY calls with strike prices ranging from 112 to 118 are the most actives due to ex-div activity (see 2:33 color). Eight of the nine SPDR Select Sector Funds are seeing volume well above the average daily today. 368K options traded in XLU, for example, which is 24X the daily average for the product. In addition to ex-div activity, a number of funds are seeing adjustments ahead of tomorrow’s expiration as well. Finally, there were some large sales of October out-of-the-money puts across a number of sector ETFs today — XLF, XOP, XRT, XME, XLI, XLY. The flow was apparently being driven by liquidating sales and likely closes positions accumulated before the Labor Day weekened (on 8/30 and 9/2). For example, a 73000-contract block of Oct 11 puts at 18 cents on XLF was sold-to-close on ISE (corrected, as it was initially indicated as an opening traded). One or more players might be exiting positions on diminishing concerns about the risk of equity market losses during the historically volatile month of October.

Category: All ETFs

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About the Author (Author Profile)

Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.