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Trader sees floor in health-care fund

Chris McKhann (chris.mckhann@optionmonster.com)

The SPDR Healthcare Fund is falling along with the broader market today, but one large trader apparently believes that further declines will be limited.

optionMONSTER systems detected the sale of 10,000 June 42 puts for the bid price of $0.27 this morning. The volume was 4 times higher than the previous open interest at the strike, clearly indicating that this is a new position.

The put selling is a bet that the XLV will hold above the $42 strike price through that June expiration. The trader also apparently believes that the stock will be relatively range-bound in coming months. (See our Education section)

The XLV is down 0.85 percent to $46.27 today, a drop that is about half that of the broader indexes on a percentage basis. The exchange-traded fund was last below $42 in mid-January.

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