Markets Brace For Fed Rate Update, Here's How To Play It

On CNBC's "Options Action," Michael Khouw of Optimize Advisors said that the Industrial Select Sector SPDR Fund XLI traded at 4.8 times its average daily call volume on Monday.

There were buyers of 25,655 of the November 100 calls at an average price of 45 cents per contract, Khouw mentioned. There was some institutional buying as well, he stated.

Check out stocks making moves in the premarket.

Traders expect Industrial Select Sector SPDR Fund to rise by at least 6% by November expiration, Khouw said. “Buying cheap call options is also a decent hedge against short positions,” he added.

XLI Price Action: Industrial Select Sector SPDR Fund declined by 0.29% to close at $94.35 on Monday.

Now Read: Tesla China Rivals See Shares Shoot Higher Amid Mixed October Deliveries: Are Investors Moving Past Xi Jinping Related Selloff?