Energy fund faces downside position

optionMONSTER

A huge trade is positioning for a potential drop in the SPDR Energy Fund even as it climbs back near recent highs.

optionMONSTER systems show that a trader bought 20,193 January 87 puts for the ask price of $0.85 this morning. The volume tops the total daily average for the XLE and the previous open interest at that strike.

The puts are not tied to any trading in the underlying shares identified by our systems so far today, so it could well be an outright bearish play. Alternatively, it could be hedging an existing long position in XLE shares or the underlying stocks in the exchange-traded fund. (See our Education section)

The XLE is up 0.34 percent to $87.54. The fund was at a high of $88.24 at the end of November but did bounce off support at $85 last week.


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