On Friday’s Options Action, the crew analyzed the performance of the financial sector. Treasury bonds had a strong performance this week, depressing yields which have a negative effect on banking stocks. European banks have also been underperforming which provides a negative headwind for US financials. Coupled with a head & shoulders formation on XLF, suggests a continuation lower towards $24. Expecting XLF to trade lower, Dan Nathan suggests buying a Sept 28/24 Put Vertical for a $0.90 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