Synthetic put bearish on Constellation Brands Inc (STZ)

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SPDR S&P Retail (NYSEARCA:XRT) – The SPDR S&P Retail (NYSEARCA:XRT), an ETF that seeks to replicate the total return performance of the S&P Retail Select Industry Index, popped up on our ‘most active by options volume’ market scanner this morning after a large spread was initiated in the March expiry put options. The bearish strategy protects against a more than 7% adverse move in the price of the underlying during the next couple of months. Shares in the SPDR S&P Retail (NYSEARCA:XRT), up nearly 20% since this time last year, today trade 0.30% lower on the session at $62.85 as of 11:45 a.m. ET. The single-largest trade in SPDR S&P Retail (NYSEARCA:XRT) options this morning appears to be a 10,000-lot Mar. $58/$62 debit put spread, purchased for a net premium of $0.97 per contract not long after the opening bell. The bearish strategist makes money if shares in the SPDR S&P Retail (NYSEARCA:XRT) decline 2.9% from the current price of $62.85 to trade below the breakeven point at $61.03. Maximum potential profits of $3.03 per contract are available on the trade should shares drop 7.7% to $58.00 during the next nine weeks to March expiration. A move down to $58.00 would return the price of the underlying fund down to the lowest level since August 2012.

Caitlin Duffy

Equity Options Analyst

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