The SPDR S&P Regional Banking Fund is seeing heavy put
activity for the second session in a row as an investor hedges the
optionMONSTER's Depth Charge tracking system detected the purchase
of 5,700 June 25 puts on the KRE exchange-traded fund, most of
which priced for $1.52. An equal number of June 20 puts were sold
at the same time for $0.40, but volume was below open interest.
That suggests that an existing position was rolled to the higher
strike for $1.12, raising the level of protection by $5. The trade
large put spread
in the KRE yesterday.
KRE is off 0.08 percent to $25.77 today. The fund is up 10 percent
in the last three months as investors regain confidence in the
Today's option trader may be using the puts to protect a long
position in KRE or its member companies, many of which don't have
deep option liquidity. The fund's biggest holdings include
CapitalSource, Webster Financial, and Trustmark.
Overall option volume in KRE is already more than triple its daily
average, with puts outnumbering calls by more than 180 to 1,
according to the Depth Charge.
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