SPDR S&P Homebuilders (XHB) $24.53 +0.74%

| November 16, 2012 | 0 Comments More

SPDR Homebuilders Trust (XHB) showing some resilience, down just a penny to $24.34, and an 18000-lot of Nov 24 puts trades on the ETF at 4 cents per contract. 21,452 traded against 33,942 in open interest and probably seeing liquidating activity ahead of the expiration. If so, the put sellers are salvaging the remaning time value on the view that the downside is limited for today and XHB is not likely to fall below $24 before the end of business Friday. XHB was the subject of put spread trading yesterday, with one player opening a Jan 20 – 24 put spread, 15000X. 42,000 Jan 24 puts were bought-to-open a few days earlier. Total open interest in puts in XHB is more than a half million contracts and the most in years (if not ever) for the product. Bearish trading comes just a couple of weeks after the ETF notched 52-week highs of $26.83 on 11/1.

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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.