Unusual Options Flow in KRE, QQQ, GDX and 3 Other ETFs

Many investors brush off unusual options activity, but others like to “follow the flow.” When large investors — like hedge funds for example — make big moves in the options world, it shows up in a very interesting way. We refer to this as “unusual options activity” and it serves as a way to see what the big investors are doing.

Luckily there’s a leaderboard of options activity for both calls and puts and it helps us track all of the outsized volume.

There’s actually a leaderboard for exchange-traded funds, too.

With that in mind, let’s look at the stocks that stuck out the most on the call side and the put side.

SPDR S&P Regional Banking ETF (KRE)

Ever since mid-March, U.S. regional banks have been in focus. That’s as several regional banks have gone under, sparking a momentary fear in regards to the banking system. For now those fears seemed to have abated, although earnings season may shed some light on what’s to come.

Interestingly, the SPDR S&P Regional Banking ETF (US:KRE) led our ETF options flow leaderboard this past week. That came amid a flurry of bullish options flow.

On April 12, one trader sold $3.84 million of the deep-in-the-money January 2024 $70 puts and $1.32 million of the January 2024 $69 puts. At the same time, they sold more than $9.4 million of the June $65 puts, as the KRE ETF was trading near $42.50 at the time.

A day later (and 12 minutes before the close), the June puts were active again. This time, someone sold $6.76 million of the $60 puts and $4.76 million worth of the $57 puts.

Invesco QQQ Trust Series (QQQ)

One of the most popular and active ETFs is the Invesco QQQ Trust Series (US:QQQ) and it was Number 2 on this week’s list. After a strong run by tech, the action here was mixed.

Shortly after the open on April 13, one trader sold $22.5 million worth of the in-the-money $330 March 2024 puts — that’s a bullish trade on its own.

The day before, on April 12, someone took an interesting risk-reversal trade, which is a bullish options position that involves selling a put and buying a call. This trader sold $10.66 million of the at-the-money May $315 puts and bought $11 million worth of the May $315 calls.

As for the bears, they were active, too. With about 30 minutes left until the close on April 13th, there were several big put trades. That’s as someone bought $7.63 million worth of the October in-the-money $315 puts with the QQQ ETF trading near $319.50. They also scooped up $7.6 million worth of the December 2024 $335 puts, expiring in more than 600 days.

VanEck Gold Miners ETF (GDX)

Silver and gold continue to rocket higher. Last week, silver was popping up on our unusual options feed. Now it’s gold, as the yellow metal is within a stone’s throw of its all-time high. Given that, it’s no surprise to see bullish options flow in VanEck Gold Miners ETF (US:GDX).

At the start of the week on April 10, someone scooped up more than $1.4 million of the slightly in-the-money $33 calls as the GDX ETF was trading near $34. This is an outright bullish bet on its own.

On April 13th, it looks like someone sold roughly $870,000 worth of the May $35 puts with the GDX trading near $35.75 and bought roughly $540,000 worth of the May $37 calls. It’s hard to tell if these are together, but if so, it’s very bullish positioning by the trader. The May and June $36 calls stayed active for the rest of the session.

SPDR S&P Retail ETF (XRT)

The SPDR S&P Retail ETF (US:XRT) has not done that well so far this year as it continues to lag the broader indices. That said, there was one bullish trade that really stuck out this week.

That’s after one trader sold $2.48 million of the at-the-money June $61 puts.

iShares MSCI South Korea ETF (EWY)

Here’s a name we have not discussed when it comes to unusual options activity in ETFs, as the iShares MSCI South Korea ETF (US:EWY) grabs our attention this week. Up about 12% so far on the year, the EWY ETF has traded pretty well in 2023.

On April 10, someone sold $3.52 million worth of the slightly in-the-money July $60 calls. On the surface, the trade looks bearish, however it actually looks like profit taking when we dig a bit deeper. That’s as someone bought $3.45 million of the same calls almost a month ago on March 13.

The interesting part is what we saw on April 12 and 13, when someone bought $2.24 million of the July $64 calls. It could have been the same trader rolling their position up, but without adding time — which would mean buying a later-dated strike — but it’s not clear if it was the same buyer or not.

Financial Select Sector SPDR Fund (XLF)

The KRE ETF received plenty of attention this week, but the Financial Select Sector SPDR Fund (US:XLF) is in focus, too. That’s particularly true as the big banks began reporting earnings on April 14. The action leaned bullish last week ahead of those earnings.

On April 12, one trader sold $13.7 million worth of the June $37 puts, $1.3 million worth of the June $38 puts and $3.1 million of the April $35 puts. All three strikes were in-the-money with shares trading near $32.50 at the time.

Some may not know this, but the XLF is one of several ETFs where the options can still trade after 4:00 p.m. ET. In any regard, one trader bought $2.7 million worth of the January 2025 $36 calls shortly after the close on April 12.

A day later, another trader bought more than $2 million worth of the April $33.50 calls — again, more bullish flow. On April 14th, someone sold more than $4 million worth of the same calls. It appeared to be a closing position, although it’s not clear if it was the buyer from the previous session.

This article originally appeared on Fintel

By Bret Kenwell