XRT – SPDR S&P Retail ETF – It looks like one well-positioned retail sector bull booked profits by unraveling a previously established debit call spread in the December contract this afternoon. Shares of the XRT, an exchange-traded fund designed to replicate the performance of the S&P Retail Select Industry Index, fell 0.85% late in the session to stand at $43.34. The trader appears to have initially accumulated a 30,000-lot debit call spread at an average net cost of $1.00 per contract between September 3 and 9 when shares of the fund were trading within a range of $38.46 to $39.12. Shares of the ETF have rallied substantially since the spread was initiated. But, perhaps the unraveling of the bullish play is a sign the investor is taking available profits of the table because he believes the rally has run out of steam. The investor sold the 30,000-lot spread at the December $41/$45 strikes today to receive a net premium of $2.285 per contract. Thus, the investor pockets average net profits of $1.285 per contract by taking the trade off at this time. Options implied volatility on the retail fund is currently up 7.4% at 26.08% with 20 minutes remaining in the trading day.
GRMN – Garmin, Ltd. – Bullish traders picked up call options on the manufacturer of consumer electronics right out of the gate this morning. Shares of the maker portable and fixed-mount GPS-enabled navigation products surged 4.6% in the first half of the trading session to secure an intraday high of $32.85, and likely attracted investors to purchase near-term call options on the stock. However, Garmin’s earlier run up in shares disappeared by 1:30 p.m. in New York, and the stock is currently down 0.30% to arrive at $31.34. Options traders exchanged more than 5,200 calls at the October $32 strike, and traded upwards of 1,940 calls at the higher October $33 strike. It looks like the majority of those calls were purchased, with approximately 2,900 lots picked up at the October $32 strike for an average premium of $0.32 apiece. Call buyers holding the October $32 strike contracts make money if Garmin’s shares rally above the average breakeven price of $32.32 by expiration tomorrow. Bulls scooped up roughly 1,100 of the calls traded at the October $33 strike for an average premium of $0.19 apiece. These calls expire worthless tomorrow unless shares exceed $33.00. Investors long the higher-strike calls are prepared to profit should GRMN’s shares surge 5.90% over the current price of $31.34 to surpass the average breakeven point at $33.19 by October expiration. Garmin’s overall reading of options implied volatility is up sharply by 21.2% to arrive at 49.17% as of 1:55 p.m.