Technology Bull Boosts Optimism

Today’s tickers: XLK, EEM, XLP, WLP, DTV, AMAT & EEM XLK - SPDR Technology Select Sector ETF – A massive calendar roll was initiated on the Technology Select Sector exchange-traded fund today. Shares of the ETF, which corresponds to the performance of publicly traded equities of companies in the technology sector, rallied nearly 0.5% to $22.29 during the session. One investor sold roughly 73,900 calls at the now in-the-money December 22 strike for a premium of 41 cents per contract. The trader likely purchased the options for 40-49 cents premium per contract back on September 18, 2009, when shares of the XLK were at $20.87. The closing sale of the original call position today was spread against the purchase of 73,900 fresh calls at the higher January 23 strike for 24 cents each. The calendar roll indicates the investor expects shares of the fund to reach a new 52-week high by expiration in January. Profits amass on the new bullish stance if shares rally above the breakeven price of $23.24. EEM - iShares MSCI Emerging Markets ETF – A large-volume put spread traded in the June contract on the emerging markets fund this afternoon. Shares of the ETF stand 0.15% higher to $41.03 as of 1:45 pm (EDT). It looks like investors, who are likely long shares of the underlying, are purchasing long-term downside protection on the EEM. Approximately 49,000 puts were picked up at the June 38 strike for an average premium of 2.95 apiece, and spread against the sale of roughly 43,000 puts at the lower June 28 strike for 65 cents each. Perhaps put spreaders fear emerging markets could encounter a few speed bumps as the global economy continues to fight its way out of recession in 2010. Traders employing the put plays are protected if shares of the fund dip back down through $38.00 by expiration in June. XLP - Consumer Staples Select Sector SPDR – The XLP ticker symbol launched to the top of our ‘most active by options volume’ market scanner today after a huge chunk of call options changed hands. Shares of the fund, which replicates the total return of the Consumer Staples Select Sector of the S&P 500 Index, gained 0.5% during the trading day to $26.90. Approximately 106,000 call options traded at the January 27 strike for an average premium of 32.5 pennies per contract. Open interest of 116,354 contracts at that strike exceeds the number of…