Energy… Comeback?

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XLE, the energy sector ETF, has been on a tear the last few weeks.

Since bottoming at 26.98 on October 29th the stock is up more than 50%.

On Tuesday the stock closed above 40.46 less than 2 dollars from the high a few days prior.

Yet,  there was a pretty larger order that caught my eye.

A trader sold 21,500 March call spreads…likely to close.

The trader sold the March 145 calls and bought the 150 calls collecting .85 cents.

I believe this is a close from a trade that was opened on November 18th

I believe the trader paid about .40 for this call spread,  so this trader has themselves a nice win.

I am surprised they closed the whole thing.

I would make note of the fact that the trader bought these on an ugly day for XLE,  and then sold them less than a month later at slightly greater than 100%.

That is not a bad trade.

Could it be an omen that energy could be getting tired?

The way XLE has rallied,  I would not be surprised.

Your Only Option,

Mark Sebastian

PS – The Zodiac says 2021 is the Year of the Ox. It’s also the year you can profit from market vol and stop missing gains. I and fellow top pros, have put together 17 (!) strategies for beating next year’s markets. Get them here.

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