The SPDR S&P Retail (XRT) exchange-traded fund is struggling to hold support at $34.50, and one large option trader is positioning for a potential breakdown.
OptionMonster's real-time systems detected a single purchase of 15,000 June 33 puts for $1.54 against open interest of 3,746 contracts.
The trade accounted for almost all the activity so far today in the retail fund, whose largest holdings include Amazon.com, Netflix, and J. Crew.
The XRT ETF is off 0.48 percent to $34.97 in morning trading but is up3.2 percent in the last three months, compared with the S&P 500's 4.6 percent gain. The relative weakness contrasts with the March-September period, when the fund outperformed the broader market by 23 percentage points.
Today's put buyer will earn a profit if the fund declines at least 10 percent by June expiration. The next scheduled events that could affect the retail sector is the release of consumer sentiment data at 9:55am ET tomorrow (Friday) and January same-store sales figures on Feb. 4.
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David Russell is a reporter and writer for OptionMonster.