On CNBC's Options Action, Dan Nathan spoke about a bullish options activity in Energy Select Sector SPDR (ETF) (NYSE: XLE). He explained that call options outnumbered put options 3 to 1 on a day when the ETF traded 1.76 percent higher.
Nathan said that he noticed a large trade in XLE and he finds it a little bit speculative. A trader bought the December 90 call for $1.15, sold two December 95 calls for a total of $0.60 and bought the December 100 call for $0.08. The trader bought 10,000 contracts and paid $0.63 for the call butterfly and he will achieve maximal profit of $4.37 if XLE trades at $95 on December expiration.
XLE closed the session on Wednesday at $85.75, which is just above its long-term support of $85, said Nathan. He explained that it is a good idea to use a strategy like a call butterfly because implied volatility is high.
Posted-In: Dan Nathan Options ActionCNBC Options Markets Media
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Related Articles (XLE) Dan Nathan Sees Unusual Options Activity In Energy Select Sector SPDR (ETF) Energy ETFs: Bargains Or Falling Knives? Fast Money Picks For October 15 Fast Money Picks For October 7 - Exxon Mobil Corporation, EMC Corporation And More Dan Nathan's Energy Select Sector SPDR (ETF) Trade Fast Money Picks For October 6: The Kroger Co., EMC Corporation & Medtronic, Inc. Around the Web, We're Loving... World Cup Championship of Binary Options! Huanity's Last Great Hope: Venture Capitalists Don't Miss The Next Webinar to Advance your Trading Will Apple Redefine How We Shop? What Did Josh Brown Say On Our Morning Show? We're Now Hiri
No comments:
Post a Comment