Carter Worth And Mike Khouw's Bearish Trade On XLF

Loading...
Loading...

On CNBC's "Options Action," Carter Worth spoke about Financial Select Sector SPDR Fund XLF.

The ETF has broken below its uptrend line recently and it looks to Worth like it is going back to its pre-pandemic highs, before the plunge. He's also concerned about XLF's relative performance versus the S&P 500. It has outperformed the market for only five to six months. The ETF is now underperforming the S&P 500 and Worth is a seller.

Mike Khouw wants to buy a put spread in XLF to make a bearish trade. Specifically, he wants to buy the September $35 put for $1.37 and sell the September $31 put for 37 cents. The trade would cost him a dollar and it breaks even at $34 or around 3.5% below the closing price on Friday. If the stock drops to $31 or lower, the trade is going to reach its maximal profit of $3.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: Sector ETFsShort IdeasOptionsMarketsMediaTrading IdeasETFsCarter WorthCNBCMike KhouwOptions Action
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...