Dan Nathan Sees Unusal Options Activity In Select Sector Financial Slct Str SPDR Fd

On CNBC's Options Action, Dan Nathan said that he noticed higher than usual options activity in Select Sector Financial Slct Str SPDR Fd (NYSE: XLF) on Monday. He explained that there was a large call options volume and calls outnumbered puts 6 to 1. When the ETF was trading at $24.33 there was a buyer of 68,000 contracts of the April 24.50 call options. The trader paid $0.21 for the trade, which sets the break even at $24.71 or approximately 2 percent higher from Monday's close. Nathan added that eight of the ten top holdings of the ETF are going to report earnings results in April. He thinks that Select Sector Financial Slct Str SPDR Fd is facing a big resistance at $25 and he believes that it won't be able to break above that price level. Nathan sees risk reward as decent because the trade risks $0.21 to make $0.30.