Financials are in focus this week as big banks earnings get underway. But one trader is betting the results could spark a massive selloff in next month.
On Monday, before bank earnings officially kicked off, one trader bet more than $260,000 that the XLF could fall more than 8 percent in just four weeks. Specifically, that trader purchased 24,000 of the August 23-strike puts for 11 cents each. Since buying a put allows a trader to sell a stock, or in this case ETF, at a set price for a given price at a set time, this is a bearish bet the XLF will fall below $22.99 by August expiration.