GLD – when the etf that tracks the price of gold was $118.76, a trader rolled up and out a bullish view, selling to close 25,000 April 114 calls at 5.70, and buying to open 25,000 of the June 121 / 133 call spread for 2.75. Whats interesting about this trade is that the investor is collecting $2.95, or $7.375 million in premium for the roll, while still risking $6.875 million if GLD is below $121 on June expiration. The trader can make up to $23.125 million if the etf is between $123.75 and $133 with the max gain above $133.
There are no shortage of market participants and commentators who think Gold may have bottomed after 4 straight years of declines that saw the shiny metal nearly cut in half from its all time high made in 2011. The etf’s recent break above $115 was the first real break of the downtrend, but a failure here, and a series of closes below $115 could mean the nearly 20% bounce off of the recent lows was nothing more than a sharper than usual counter-trend rally:
XLI – the industrial sector etf saw a large bullish roll, when the stock was trading $54.16 a trader sold to close 15,000 March 53 calls at 1.23, sold 40,000 March 54 calls at 41 and bought to open 40,000 April 54 calls for 94 cents. The XLI has rallied 15% off of its intra-day Feb 11th low, vs the SPX up about 12% in that same period.
XLY – the consumer discretionary etf say a large bearish roll when the stock was trading $77.69 shortly before the close. A trader sold to close 20,000 April 1st weekly 72.50 puts at 19 cents, and bought to open the April 78 / 75 / 72 put butterfly 15,000 by 30,000 by 15,000, paying 64 cents, or $960,000 in premium. This butterfly offers gains of up to $3.36 between $77.36 and $72.64 with max gain of $3.34 at $75, losses of up to 64 cents between $72 and $72.64 and between $77.36 and $78 with max loss of 64 cents below $72 and above $78.
The XLY is one of the few sector etfs that did not break its August 2015 lows on the most recent sell off, bouncing off of the uptrend that has been in place since early 2009: