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Floor targeted in health-care fund

Chris McKhann (chris.mckhann@optionmonster.com)

The SPDR Health Care Fund has bounced off intraday lows today, and one large trader is apparently believes that any losses will be limited in coming weeks.

optionMONSTER systems shows that 6,000 February 52 puts was sold for the bid price of $0.17. The volume was 10 times higher than the strike's previous open interest, so this is clearly a new position.

Put selling is popular strategy when a trader thinks that the underlying will hold above a certain level. It is a mildly bullish position, as the trader has positive delta and does face the obligation to buy shares on a pullback. (See our Education section)

The XLV is down 0.29 percent to $55.24 in early afternoon trading after dipping to $54.65 in the morning. The exchange-traded fund has been trading lower in the last two weeks after hitting an all-time high of $57.50 on Jan. 22. It was last below $52 in mid-October. 

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