Put Buying On Index ETFs, Plunge Protection? (XRT, XLY, XLI, KRE, FAZ)

Bearish put strategies or hedges are popping up on a variety of Index ETFs. First here's what Jim Fitzgibbons of Susquehanna Intl. Group had to say on the floor at the CBOE. He saw people buying protection on the Retail and Industrial ETFs as well as the S&P 500.



Also read these articles:

5/1 - Retail SPDR Gets Bearish Attention (XRT)
4/28 - US-Consumer Discretionary ETF draws put spread (XLY)
4/22 - Financial worries spark bearish option trades in ETFs


Now a look visually at each option chain with activity skewed toward out-of-the-money puts (except FAZ which is upside down w/ calls). The first chains are the retail and consumer sector and the other chains show activity on the industrials, FAZ (3x Bearish Financials call buying) and regional banks (hat tip ONN.tv/OptionMonster for that one). So something is definitely up. All snapshots are from Yahoo Finance on May 1, 2009. The volume and open interest will change next week.

XRT (SPDR S&P Retail) May Option Chain

XRT (SPDR S&P Retail) June Option Chain

XLY (Consumer Discretionary SPDR) May Option Chain

XLY (Consumer Discretionary SPDR) June Option Chain

XLI (Industrial SPDR) May Option Chain

KRE (Regional Bank ETF) May Option Chain

KRE (Regional Bank ETF) June Option Chain

FAZ (3x Bearish Financials) May Option Chain


The question is will we correct between now and 1,050 on the S&P? (Goldman Sachs’s Cohen Says S&P 500 May Surge to 1,050 -Bloomberg). I wouldn't want to fight w/ Cohen's target after reading this...!

Related Posts