U.S. Markets closed

Retail fund seen holding near highs

Chris McKhann (chris.mckhann@optionmonster.com)

The SPDR S&P Retail Fund hit an all-time high this morning, and traders apparently believe that those gains will stick.

Total option volume in the XRT tops 8,000 barely an hour into the session, already surpassing its full-day average for the last month. Almost all of the activity is in one print.

optionMONSTER systems detected the sale of 7,000 August 77 puts for the bid price of $0.76 today. This is clearly a new position, as open interest in the strike was just 95 contracts before the trade appeared.

The XRT is up 0.31 percent to $79.82 after breaking the $80 mark for the first time. The exchange-traded fund was down to support at $75 at the end of June but has been trending higher from the $60 level it reached at the end of 2012.

Today's put seller is making the bet that the XRT will hold above $77 through mid-August. The trader is also showing the willingness to buy shares if they fall below that level, for an effective buying price of $76.24 when the credit from the put sale is included. (See our Education section)

More From optionMONSTER