XRT, XLK Options – Unusual Trading Activity – September 3, 2014

| September 3, 2014 | 0 Comments

Unusual Trading VolumeThis week we’re taking a look at unusual options trading activity in SPDR S&P Retail ETF (XRT) and Technology Select Sector SPDR ETF (XLK).

As many of you know, unusual options volume can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.

This is something professional options traders pay a lot of attention to, and for good reason… Unusual options activity can “tip off” big moves in a stock, either up or down.

So let’s take a look at some ‘interesting’ activity that caught our eye this week:


One trader looks to be cashing in on the retail sector’s latest surge.

XRT, a popular retail sector ETF, is currently trading for $89.08. The price is 17% above the 52-week low of $76.47 and is less than a 1% below the 52-week high of $89.36.

Today, a trader sold 10,000 of the XRT 90 calls expiring at the end of the week. The sale price was $0.27 per contract. Judging by open interest, it looks to be a closing trade.

It’s difficult to know for sure what the original trade may have been, or if it was tied to shares of XRT. However, given the recent climb in XRT’s price, the trader is most likely cashing in on a successful naked long call trade.

Technology Select Sector SPDR ETF (XLK)

Another sector on the rise recently is technology – and plenty of bullish options activity suggests the run will continue.

XLK is trading for $40.16. The shares are just 1% below the 52-week high of $40.37 and 31% above the 52-week low of $30.73.

Over 26,000 calls were purchased today in December expiration with a strike price of 42. The average price of the calls was $0.35. And, it’s clearly an opening trade based on open interest.

The spike in XLK has a lot to do with Apple’s (AAPL) success of late. With the big AAPL launch event next week, this trade could be a bet that the tech sector is going to surge higher on new product news.

More Options Ideas…

That wraps up this week’s unusual options trading and volume…

Keep in mind, there’s a lot more unusual options activity going on than what we discuss here.

We just try to bring you what we feel are the most significant ones– and the ones you might actually be able to make some money on!

So keep an eye on your email inbox… we have a lot more options trading ideas coming your way!

Yours in Profit,

Gordon Lewis

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Category: Unusual Options Trading Activity

About the Author ()

Gordon Lewis is the Chief Investment Strategist and editor for the popular daily newsletter – Options Trading Research. He’s also editor of our dynamic theme-based options trading service, Advanced Options Adviser, and one of the key analysts behind the highly successful Options Trading Wire.