On Friday’s CNBC’s Options Action, the crew analyzed the performance of the financial sector (XLF). XLF has severely underperformed the market on an absolute and relative basis over the past decade. Coupled with the lower interest rate environment which hurts the regional banks, financials have a hard time catching up with the market. Additionally, with a neutral interest rate outlook, expectations are mutued for a breakout for financials, Michael Khouw suggests buying a March 27/25 Put Vertical for a $0.35 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: XLF Options Action