The SPDR Materials Fund has been ripping higher, and one large trader apparently believes that the ETF's shares have found a bottom.
The XLB is down 0.7 percent this morning to trade at $36.31. Shares of the exchange-traded fund have run up from support at $32 in the last month after hitting a 52-week low of $27.77 in early October. The last week has seen the fund trade at its highest levels since early August.
optionMONSTER's systems show that a trader sold 5,800 June 30 puts for the bid price of $0.67. The previous open interest at that strike was just 5,035, so this is a new opening position.
The put selling is a bet that the XLB will remain above $30 through expiration. This is a high-probability trade, as the delta of those options suggests a 16 percent likelihood that the fund will be below the strike price at expiration. The trader is also showing the willingness to buy 580,000 shares of the XLB if it does fall under that level. (See our Education section)
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