The large blocks of puts in XLB, XLI, and XLF, as well as the spread trading in XHB, XRT, and XLY, are short-term bearish positions that will pay off if the equity markets make a move lower in the near future. It's probable that portfolio managers initiated some of these trades against stock positions to hedge short-term risk. Nevertheless, the overall flow seems somewhat defensive and reflects the view that the S&P 500 might soon pull back from its five-year highs.

OptionsProfits can be followed on Twitter at
At the time of publication, Henry Schwartz held no positions in the stocks or issues mentioned.

If you liked this article you might like