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Energy fund faces large put spread

Chris McKhann (chris.mckhann@optionmonster.com)

A large put spread is targeting the SPDR Energy Fund as it falls today.

optionMONSTER's Depth Charge system shows that a trader bought 4,000 July 78 puts for $1.49 and sold the same number of July 75 puts for the bid price of $0.69. Twenty minutes later, another 4,000 July 78s were bought for $1.62 and 4,000 July 75s sold for $0.77.

This put spread is looking for the XLE to continue to decline in coming weeks. There was also some action in the June 79 puts preceding the spread, so part of the trade could also be a roll out from those options, which expire at the end of tomorrow's session. (See our Education section)

The XLE is down 2.03 percent to $79.13, its lowest level since the start of May. The exchange-traded fund traded up to $83.95 a month ago but was below that $75 level in mid-April. 

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