Traders are hedging against a weak holiday shopping season using the SPDRs Consumer Discretionary Fund.
optionMONSTER's Depth Charge monitoring system detected the purchase of 13,400 Weekly 78.50 puts expiring on Jan. 8 for $1.03. There was no open interest before the trade appeared, which means that new money was put to work.
Long puts fix the price the price where a stock can be sold, so they make money to the downside. Investors use them to hedge long positions or to speculate on a drop. (See our Coaching section)
XLY is down 0.72 percent to $80.89 in afternoon trading but is up 8 percent in the last three months. Major holdings include retailers such as Amazon.com, Home Depot, and Nike. Media names like Walt Disney and Comcast are also present.
Today's puts are timed to match the end of the holiday shopping season, during which some companies may pre-announce quarterly results.
Overall XLY option volume is about average. The Depth Charge shows puts outnumbering calls by a bearish 11-to-1 ratio.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.