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.
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