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Pete Najarian Spots Unusual Activity in S&P Leader

Pete Najarian has spotted unusual put buying in an S&P sector that had been a bull market leader. What does he make of it?

Specifically, Najarian is closely watching the Materials ETF after big money bought an unusually large quantity of December 34 puts.

The trade begs the question – was it a big bet to the downside or protective put buying?

Pete Najarian thinks it’s put protection – a steal sign that institutional investors think the market goes higher.

Unless the Vix pushes above 29, its 50-day, Najarian thinks the decline on Monday is nothing more than profit taking before the next leg higher.

And he believes with financials still in a state of flux, bulls plan to drive the market with sectors that benefit from global growth such as Materials.

”I think they’re buying protection and getting ready for a ride to the upside,"
he says.




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Trader disclosure: On Oct 31, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Najarian is long AAPL; Najarian is long C; Najarian is long MS; Najarian is long INTC; Najarian is long YHOO; Najarian is long MSFT; Najarian is long SNDK; Grasso owns AA; Grasso owns AKS; Grasso owns ASTM; Grasso owns BA; Grasso owns BAC; Grasso owns D; Grasso owns KEG; Grasso owns LIT; Grasso owns MHY; Grasso owns PFE; Grasso owns S; Grasso owns XLU; Dicker owns GLEN.L

For Steve Grasso
Stuart Frankel & Co and it’s partners own (CSCO)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HPQ)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own MET
Stuart Frankel & Co and it’s partners own MU
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own UAL
Stuart Frankel & Co and it’s partners own XRX

For Rich Repetto
Sandler O'Neill was a manager or a co-manager of a public offering of securities for MF Global Holdings Ltd. in the past 12 months. Sandler O'Neill has received compensation from MF Global Holdings Ltd. for investment banking services in the past 12 months. Sandler O'Neill has received compensation from MF Global Holdings Ltd. for providing products or services other than investment banking services in the 12-month period ending as of the second most recent month preceding the date of this report. MF Global Holdings Ltd. was a client of Sandler O'Neill in the 12-month period ending as of the second most recent month immediately preceding the date of this report. During that period, Sandler O'Neill provided investment banking services to MF Global Holdings Ltd..


CNBC.com with wires.

Symbol
Price
 
Change
%Change
VIX
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SPDR MAT SEL
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