Financial Select Sector (XLF) $15.97 -0.47%

| October 9, 2012 | 0 Comments More

Several big prints surfaced in the SPDR Financials (XLF) just before 1:00 EDT on ISE. The largest was a Jan 13 – 15 put spread for 27 cents, 80000X. The position is opening and traded firm-to-firm. It’s similar to the large Dec 13 – 15 put spreads that surfaced in XLF in late-Sept (see 9/24 and 9/26 color) and seems to express a bearish view on the banking sector for the weeks/months ahead. Separately, a 23500-lot of May 12 puts trades on XLF for 12 cents and is a closing trade, according to ISEE data. A third big block is 26500 Jan 17 calls for 22 cents and an opening (firm, not customer) buyer. Shares saw an unusual spike this morning, to $16.49 and beyond the 9/14 52-week highs of $16.28, with a possible errant algo trade affecting a number of Big Board tickers this morning (unconfirmed). However, the glitch (which also affected P, HTS, WFR, and a handful of other tickers) is probably not the motivation driving the large blocks of options in the XLF this afternoon.

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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.