Trade of the Week: XLF

Trade of the Week

It’s the summer doldrums in the trading world, so traders are making due with whatever the market is willing to give. For instance, last week a strategist placed what appears to be a covered call trade in the Financial Select Sector SPDR ETF (XLF). This popular financial sector ETF is generally not very volatile and only pays a 1.8% dividend yield. A covered call position in XLF could be a method of increasing cash flow on the shares while waiting for more interesting market conditions.