IB Options Brief: Financial Select Sector SPDR ETF (XLF)
XLF – Financial Select Sector SPDR ETF
Traders positioning for financial stocks to extend gains on the heels of Thursday’s FOMC announcement are loading up on XLF call options this morning. Shares in the Financial Select Sector SPDR ETF earlier rallied as much as 1.8% to hit a new 52-week high of $16.44. Overall options volume on the fund is well above 500,000 contracts as of 11:35 a.m. ET, with the call-to-put ratio hovering just below 10-to-1.
The Oct. $17 strike call has changed hands more than 320,000 times so far today against open interest of 215,271 positions. Much of the previously opened positions were established yesterday as traders stepped up to purchase the contracts for an average premium of $0.07 apiece. This morning, it looks like buyers are once again in the driver’s seat, paying an average of $0.12 per contract for the $17 strike call options.
Traders getting long the contracts at around $0.12 apiece stand ready to profit at expiration next month if the price of the underlying rallies another 4% over today’s high of $16.44 to top the average breakeven price of $17.12. Shares in the XLF are off their highs of the day, up 0.90% at $16.30 as of 11:50 a.m. in New York.
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