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Options Traders Beginning To Bet On A Pullback In The XLF

Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today points out some bearish options bets seen late last week in the largest financial-focused ETF, as well as some big money rolling into a popular Brazilian fund.

XLF (SPDR Financial) options have been among some of the most active recently, but not everyone seems convinced that the sector will continue to trend higher. As we have previously mentioned, the ETF had a $19 handle prior to Trump’s election last November, and has risen all the way above $24 in a relatively short time period.

Mostly the options flows have consisted of call buying for the past several weeks, but late last week we also saw a dose of April 23 put buying. Year-to-date, XLF still continues to see net inflows with more than $1.4 billion entering the fund in spite of recent nibbling on puts, so the big money is still firmly on the bullish side.

In other activity we, have seen some decent sized inflows in EWZ (iShares MSCI Brazil) on a sudden pullback from new recent highs (over $350 million in).

The Financial Select Sector SPDR Fund (NYSE:XLF) was trading at $24.49 per share on Monday morning, up $0.07 (+0.29%). Year-to-date, XLF has gained 5.33%, versus a 5.98% rise in the benchmark S&P 500 index during the same period.

XLF currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 38 ETFs in the Financial Equities ETFs category.

About the Author: Paul Weisbruch

paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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