Trade of the Week: XLF

Financial Sector, Options, Videos


Last week, there was some unusually large options activity in Financial Select SPDR ETF (XLF). XLF tracks financial stocks such as banks and asset management companies in the S&P 500. On a particularly brisk day for options trading, XLF had about 2x more options volume than normal. A large chunk of the volume came in a three-legged collar trade with 25,000 options per leg. The trade caps some upside potential in XLF in exchange for a credit, which is mostly used to buy puts for downside protection.