Utilities fund draws heavy put selling

Chris McKhann (chris.mckhann@optionmonster.com)
August 15, 2013

Huge put sales topped yesterday's option volume in the SPDR Utilities Fund as its shares continued to slide.

More than 210,000 XLU options changed hands in the session, more than 10 times its daily average for the last month. That volume was dominated the December 38 puts, which traded more than 147,000 contracts.

The biggest print of 99,000 was sold for the bid price of $1.51, while another block of 47,240 was sold for $1.41.

This put selling is a bet that the XLU will hold up above $38 through mid-December. The trader would also face the obligation to buy shares if they are below that strike price. (See our Education section)

The XLU was down 0.65 percent to close at $38.47, continuing to trade lower in the last four sessions. The exchange-traded fund had been testing resistance near $40 but unable to get above that level. Shares were below $37 at the beginning of July.

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