Here’s the option chain for near XLB puts. When compared to yesterday’s post of the XLB call chain the open interest makes it apparent that the put strategy also noted yesterday is the (much) more popular approach. This is most likely due to the relative low volatility of XLB which makes it difficult to generate much premium decay on the call side relative to the easier money that can be generated by selling puts. If the VIX gets moving to the upside again this situation may change, but for now this is the Lazy Man’s tactic of choice.
Immediately below: the top 10 components of XLB. Below that . . the top 10 components of DBC revealing that DBC is really a basket of oil products whereas XLB is a much more diversified basket of metals and oil.
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