Huge Block of Calls Trade on the XLF

Shares of Financial Select Sector SPDR Fund

are higher on the session by 0.31%, currently trading at $14.74. The ETF has been moving largely higher over the past three months and is currently trading above the 50-day moving average. Despite the large move in the XLF, one options trader is looking for higher prices. Just moments ago a 50,000 contract block of May $16.00 calls was purchased for $0.21. A 175,000 contract block, bought for $0.21 followed shortly after. Open interest on the strike is a paltry 7,069 contracts, indicating that this was fresh positioning. The trade went off for roughly 21.6% volatility; the current overall implied and historical vol of XLF is 24% and 14%, respectively. This trade voices the opinion that shares will continue its medium-term upward trend. Given that shares are now trading above the 20-day, 50-day, and 200-day moving average, buying momentum is on the XLF's side. The Financial Select Sector SPDR Fund seeks to provide investment results that before expenses correspond generally to the price and yield performance of publicly traded equity securities of companies in The Financial Select Sector Index.