Jim Strugger's Financial Select Sector SPDR Fund Trade

Speaking on Bloomberg Markets, Jim Strugger suggested a bullish options strategy in Financial Select Sector SPDR Fund XLF ahead of the earnings season for the financial stocks.

Strugger said that the put - call open interest ratio in the name has declined over the last week, which means that the market seems to be setting up for the long side, entering the earnings for the financials. He added that a possibility of the interest rate hike and a stronger dollar are also bullish for the financials.

Strugger thinks that the interest rate hike theme could be played with a purchase of the January 20 call in Financial Select Sector SPDR Fund, but he also suggested that traders could buy the December 129 put in iShares Barclays 20+ Yr Treas.Bond (ETF) TLT or they could buy the December 25 calls in PowerShares DB US Dollar Index Bullish UUP.