Large Bear Put Spread Initiated on Financial Select Sector SPDR (XLF)

From Insider Monkey:

The single-largest trade initiated in Financial Select Sector SPDR options on Tuesday protects against a limited, albeit substantial, adverse move in the price of the underlying fund during the next few months. Shares in the Financial Select Sector SPDR reached their highest level in nearly two years this past Friday, trading up to $17.08 on the heels of a more than 25% rally since this time last year. The Financial Select Sector SPDR ETF is off slightly today, trading lower in line with the broader market, with the shares now down 0.70% to stand at $16.89 as of 12:45 p.m. in New York trading. One large options market participant is prepared to see continued declines in the price of the underlying with the purchase of a 95,000-lot April $14/$16 put spread today at a net premium outlay of $0.275 apiece. The spread makes money if shares in the Financial Select Sector SPDR dip 7% to breach the effective breakeven price of $15.725, with maximum potential gains of $1.725 per contract available in the event of a more than 17% pullback to $14.00 by April expiration. Though the transaction was not tied to stock, it’s possible the position was implemented to hedge a long position in shares of the Financial Select Sector SPDR ETF.

S&P 1457, XLF $16.96 -.05.