Trade Update – $XLP: Closing Nov Calls for a quick gain

by CC October 9, 2015 10:03 am • Trade Updates

I guess it is safe to say that you could have thrown a dart to buy any stock (save AAPL) or sector (save Biotech) in the U.S. market this past week and made money.  We did just that in the etf for consumer staple stocks, the XLP last Friday, but not for the same reasons people are buying Facebook and Netflix. We thought staples would outperform in a rocky market, and trade ok in a decent market. Well, we have had more than a decent market since the opening lows last week, with the S&P500 up almost 7%.  The XLP has rallied only 4%, but that rally has the calls we bought last Friday nearly at a double.  Here was the trade from last Friday: 

Trade: XLP ($47.45) Buy to Open Nov 47 call for $1.45

Now with the etf up $2 at $49.45 we are going to take the quick profit and move on.

Action: XLP ($49.45) Sold to Close Nov 47 call at $2.75 for a $1.30 gain

We’ll keep this on our shopping list to re-enter on any broader market weakness.