IB Options Brief: Consumer Stapes Select Sector SPDR Fund (XLP)
Bullish Plays Crop Up In Consumer Staples ETF Call Options
XLP ñ Consumer Stapes Select Sector SPDR Fund
Options activity on the Consumer Staples SPDR in the first 10 minutes of the session suggests one strategist is long-term bullish on shares in some of the largest and most well-known U.S. companies. Shares in the XLP are up 1.0% today at $34.11, just off the ETFís record high of $34.42, as U.S. equities move broadly higher.
The XLPís top 10 holdings, which make up nearly 70% of the fund, include Dow heavyweights the likes of Procter & Gamble, Coca-Cola and Wal-Mart Stores. Coca-Cola, the fundís second-largest holding, is up nearly 3.0% this afternoon after the Company reported better-than-expected first-quarter results.
The long-dated options position established on the ETF this morning stands to benefit from substantial bullish movement in the price of the underlying over the next year and eight months to expiration.
It looks like the trader responsible for the transaction purchased a block of 10,000 calls at the Jan. 2014 $37 strike for a premium of $0.89 apiece. Profits are available on the position at expiration if shares in the XLP climb 11.0% to top a new record high of $37.89. A couple of hours into the trading day the same-strike call expiring in January 2013 was purchased 26,600 times at a premium of $0.23 each.
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