As a contrarian I'm not one to look at many volume indicators – I'd rather lead than follow. That said, I found this Reuters article interesting because it highlights a few institutional trades on the SPRDs XLB (Materials), XRT (Retail), KRE (Regional Banking) where a large amount of speculitive put options were purchased. The gamble focused on all out-of-the-money options, which are 100% time premium generally the most speculative type of option choice. Here's a breakdown of the four block trades placed from Joe Kunkle (OptionsHawk.com):
According to Kunkle, the following trades were transacted:
- In the Retail ETF, an investor bought 115,000 March $28 puts at a premium of 12.50 cents per contract, offer side, The XRT shares rose 8 cents to $35.34
- The Regional Banks ETF attracted a buyer of 60,000 March $20 puts at 22 cents per contract, near offer. KRE shares slipped 39 cents to $24.64.
- The Consumer Discretionary ETF had a buyer of 140,000 March $24 puts at a premium of 12 cents. The XLY was off 3 cents to $29.56.
- And in the Basic Materials ETF there was a buyer of 78,000 March $26 puts for 22 cents, and closer to the offer. The XLB edged up 4 cents to $32.30.
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