The appeal of XLF (Financial Sector SPDR ETF) puts now are twofold: First, XLF appears destined for a breakdown into the mid-to-low $40's; and secondly, the "next month, just-out-of-the-money puts, are insanely cheap relative to even a small percentage decline over the next few weeks. XLF Weekly The early stages of a hard down spike. XLF - 180 Minute Declined 5% over past two days; 10% more and its at $45. There are 24 days left before Mar expiration. 0.04% per day = 10%. XLF March Puts 10% lower for XLF = $45; at that price level the Mar 50P is worth 5.00. Alternatively, for a longer-term swing position: XLF Apr Puts XLF Top 10 Holdings Market Moving Events - Pending Tonight is the State of the Union address which is certain to garner close scrutiny with bullish to bearish results on a very short-term time frame, i.e., to be ignored. The same can be said for Wednesday's earnings extravaganza from NVDA. By mid-day Thursday the market will have digested both events and get back to its intermediate term trend, which as of yesterday, is down. Any surprises will either be short-lived or in the direction of the main trend. The heart of the down move is still ahead, whether that be measured in days or weeks, it's still to come. As of this update, we own QQQ and XLF puts in the PRO options portfolio as our leveraged plays to the downside.
