Bullish Trade On This Bank ETF (KBE)

The SPDR KBW Bank Fund (NYSE:KBE) is up near resistance again, and one trader is using a combination trade to bet on a breakout. (KBE) is down 0.54 percent to $23.76 in morning trading. It tested $22 last week and has bouncing between that support and $24 for the last four months,” Chris McKhann Reports From Option Monster.

McKhann goes on to say, “The average daily options volume is 3,800, but 20,000 trade this morning. All but a fraction of that went off in a June combination. A trader bought two blocks of 5,000 of the 26 calls for $1.20 and $1.25.  At the same time, they sold two blocks of 5,000 of the 21 puts for $1.15. The previous open interest at both strikes was less than 250 contracts.  The trader risks $0.10 if the KBE stays within the range of $21 and $26. Beyond those bounds the trade will have the risks and returns of long stock, generating huge leverage in both directions.”


The investment seeks to replicate the performance of the KBW Bank Index. The fund uses a passive management strategy designed to track the total return performance of the Bank index. It is non-diversified.

SPDR KBW Bank ETF      
Ticker Symbol: KBE      
Holdings:  As Of 12/03/2010      
Name Weight Ticker Shares Held
Citigroup Inc 11 (C) 32633304
Jpmorgan Chase & Co 8.4 (JPM) 2800041
Wells Fargo & Co New 7.18 (WFC) 3260986
Bank Of America Corporation 6.86 (BAC) 7631350
Us Bancorp Del 6.13 (USB) 3265418
Huntington Bancshares Inc 4.68 (HBAN) 9646513
M & T Bk Corp 4.55 (MTB) 743415
Fifth Third Bancorp 4.46 (FITB) 4435573
Suntrust Bks Inc 4.32 (STI) 2213396
Regions Financial Corp New 4.02 (RF) 8719760
Comerica Inc 3.93 (CMA) 1311948
Pnc Finl Svcs Group Inc 3.88 (PNC) 895243
Zions Bancorporation 3.61 (ZION) 2238161
Bank Of New York Mellon Cor 3.58 (BK) 1686227
Bb&T Corp 3.43 (BBT) 1830911
Capital One Finl Corp 3.28 (COF) 1118436
Keycorp New 3.17 (KEY) 5105490
Marshall & Ilsley Corp New 3.09 (MI) 7295009
State Str Corp 2.57 (STT) 741309
Cullen Frost Bankers Inc 1.93 (CFR) 451870
Commerce Bancshares Inc 1.91 (CBSH) 662074
Northern Tr Corp 1.82 (NTRS) 455707
Peoples United Financial In 1.43 (PBCT) 1457793
First Niagara Finl Gp Inc 0.67 (FNFG) 677790
State Str Instl Liquid Resvs 0.1 85749P9A 1334855

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