Options Action Heats Up In The Materials Sector ETF (XLB)

“The big option action in exchange-traded funds today is in the materials sector.  The Materials Select Sector SPDR (NYSE:XLB) continues to retreat from its second highest close of the year. It trades at $34.32, down 1.44 percent on the day. The ETF closed above $35 on Monday, its second-highest close of the last two years behind the April 26 peak,” Chris McKhann Reports From Option Monster.

McKhann goes on to say, “The XLB’s average option volume is 22,000 contracts a day, but a single print is larger than that today, driving the overall option volume to 37,500. Dominating this action is the November 34 put strike, with more than 31,000 against open interest of 20,310 contracts. The largest block of 22,679 was bought for $0.85 as the price has been pushed up from buying at $0.70.”

“This put buying isn’t clearly tied to any action in XLB shares, so it could be an outright bearish bet expecting that a pullback will hit hard in this area. Or it could be protective buying on long shares against the possibility of that happening,” Mckhann Writes.

Take a look at our category on the ETF for more in-depth articles below:

Materials Select Sector SPDR (NYSE:XLB) Visit Our (XLB) Category: HERE

Here is a snapshot of the options activity mentioned:

Call Options Expire at close Friday, November 19, 2010
Strike Symbol Last Chg Bid Ask Vol Open Int
30.00 XLB101120C00030000 5.20 0.00 4.20 4.45 57 57
31.00 XLB101120C00031000 2.99 0.00 3.25 3.75 5 50
32.00 XLB101120C00032000 2.17 0.00 2.54 2.58 10 707
33.00 XLB101120C00033000 1.71 Down 0.64 1.74 1.78 43 2,123
34.00 XLB101120C00034000 1.03 Down 0.19 1.07 1.11 30 3,244
35.00 XLB101120C00035000 0.59 Down 0.14 0.57 0.60 1,182 18,648
36.00 XLB101120C00036000 0.27 Down 0.07 0.26 0.29 84 1,085
37.00 XLB101120C00037000 0.12 Down 0.04 0.11 0.13 1,314 4,197
38.00 XLB101120C00038000 0.06 0.00 0.03 0.06 8 60
39.00 XLB101120C00039000 0.04 0.00 0.02 0.04 1 97
40.00 XLB101120C00040000 0.02 0.00 N/A 0.04 100 100
41.00 XLB101120C00041000 0.01 0.00 N/A 0.02 178 178
Put Options Expire at close Friday, November 19, 2010
Strike Symbol Last Chg Bid Ask Vol Open Int
30.00 XLB101120P00030000 0.09 0.00 0.09 0.11 13 516
31.00 XLB101120P00031000 0.07 0.00 0.14 0.17 171 3,226
32.00 XLB101120P00032000 0.27 Up 0.09 0.26 0.28 52 1,747
33.00 XLB101120P00033000 0.50 Up 0.20 0.46 0.48 53 5,865
34.00 XLB101120P00034000 0.80 Up 0.26 0.79 0.81 31,009 20,310
35.00 XLB101120P00035000 1.15 Up 0.22 1.27 1.31 15 1,265
36.00 XLB101120P00036000 1.62 0.00 1.96 2.01 18 493
38.00 XLB101120P00038000 3.80 Up 0.87 3.70 3.95 41 150

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