No tech, no problem. Dow makes record and traders think these stocks can lead now
The market’s flashiest group took a step back on Thursday, with chip stocks falling 1.5%, but U.S. stock market bulls didn’t miss a beat.
Dow Jones Industrial Average It closed at a new record after a 2% gain, and the S&P 500 jumped 0.4% as 9 of 11 sectors rose. While healthcare stocks led the gains, options traders followed suit, with a handful of insurers and drugmakers pushing to new highs.
Investors purchased approximately 5,300 calls State Street Health Care Select Sector SPDR ETF (XLV) That’s compared to just over 1,000 sales on Thursday, according to data from ThinkOrSwim. At the same time, just over 2,000 calls were sold, with $11 million of the $13 million traded in the fund tied up in calls.
State Street Health Care Select Sector SPDR ETF (XLV), YTD
Insurers were among the big winners of the category Humanitarian And Centeneboth hit one-year highs and United Health GroupIt closed just below the one-year high it reached in May. Options trading was heaviest at UnitedHealth; 87% of the $135 million in option premium traded here was tied to calls.
Bulls loved it too Eli LillyIt’s a major leader in weight-loss drugs, down just below all-time highs, up more than 4% from a week ago. Amid $145 million in option premium trading, calls accelerated to more than two-to-one, with traders buying more than 10,500 puts; This was more than double what they sold for and three times more than their put sales.
Option flows in the sector are particularly notable compared to a nearly equivalent rally in the financial sector, another underperforming group that led Thursday’s rally.
inside State Street Financial Select Sector ETF (XLF) When we followed the industry, options trading was much more complex, albeit at much larger volume. According to SpotGamma data, approximately 380,000 options are traded in the fund; The premium is split roughly equally between calls and puts, with more calls being sold than calls being bought.
