“Metal stocks have taking a beating in the last two weeks, and now one trader is looking for more downside using the SPDR S&P Metals & Mining exchange-traded fund (NYSE: XME). optionMONSTER’s Depth Charge tracking system yesterday detected the purchase of 10,000 May 52 puts for $1.86 and the sale of an equal number of May 49 puts for $0.86. This put spread resulted in a net cost of $1,” Options Monster Reports.

They go on to say, “At the same time, a similar existing position was unwound in the May 56 and May 53 puts, resulting in a credit of $1.81. Rolling the strategy down to a lower strike price allowed the trader to recover $0.81 of premium, while giving exposure to a deeper decline. They now stand to earn 200 percent on the $1 they have at risk if (XME) closes at or below $49 on expiration.”

“The fund dropped 4.42 percent to $52.95 and is down 15 percent since mid-April. The sector has been losing momentum following a weak earnings report from Alcoa, concerns about European sovereign debt, and Australia’s move to impose a new tax on resource “super profits.” XME had climbed 26 percent between the between the beginning of February and the beginning of April as investors priced in strong economic growth globally. The trades pushed overall options volume in the fund to nine times greater than average, with puts accounting for 91 percent of the activity,” Options Monster Reports.

Here are some details on the SPDR S&P Metals & Mining ETF (NYSE: XME) including a list of the holdings within the ETF.

SPDR S&P Metals and Mining ETF (NYSE: XME)

The SPDR® S&P® Metals and Mining ETF seeks to replicate as closely as possible, before expenses, the total return performance of the S&P Metals and Mining Select Industry® Index (ticker:SPSIMMTR).  Our approach is designed to produce portfolios with low portfolio turnover, accurate tracking, and lower costs.

Fund Name:	SPDR S&P Metals and Mining ETF
Ticker Symbol:	XME
Holdings:	As Of 05/04/2010
Name	Weight	Ticker	Sector	Shares Held
Carpenter Technology Corp	4.76	(CRS)	Materials	1121428
Newmont Mining Corp	4.65	(NEM)	Materials	778573
Royal Gold Inc	4.63	(RGLD)	Materials	856557
Reliance Steel & Aluminum C	4.46	(RS)	Materials	821547
Stillwater Mng Co	4.41	(SWC)	Materials	2743465
Coeur D Alene Mines Corp Id	4.4	(CDE)	Materials	2372540
Titanium Metals Corp	4.39	(TIE)	Materials	2757157
Hecla Mng Co	4.37	(HL)	Materials	7083204
Allegheny Technologies Inc	4.33	(ATI)	Materials	767030
Arch Coal Inc	4.31	(ACI)	Energy	1536782
Nucor Corp	4.27	(NUE)	Materials	860338
Compass Minerals Intl Inc	3.98	(CMP)	Materials	478290
Alcoa Inc	3.96	(AA)	Materials	2864510
Patriot Coal Corp	3.93	(PCX)	Energy	1925781
Peabody Energy Corp	3.86	(BTU)	Energy	800175
Walter Energy Inc	3.78	(WLT)	Materials	444769
Freeport-Mcmoran Copper & G	3.75	(FCX)	Materials	483728
Commercial Metals Co	3.71	(CMC)	Materials	2283637
United States Stl Corp New	3.71	(X)	Materials	634489
Alpha Natural Resources Inc	3.65	(ANR)	Energy	756406
Cliffs Natural Resources In	3.63	(CLF)	Materials	605490
Steel Dynamics Inc	3.59	(STLD)	Materials	2172718
Consol Energy Inc	3.33	(CNX)	Energy	717067
Massey Energy Corp	3.01	(MEE)	Energy	774693
Ak Stl Hldg Corp	2.95	(AKS)	Materials	1677057
State Str Instl Liquid Resvs	0.17	85749P9A	Unassigned	1524034

 

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XME