Financial Select Sector SPDR Fund (XLF) seems to have found a bottom after getting a pretty nice face punch for the first three weeks of the month.
Now that it is back to $36, I think it's time to look at going long.
The XLF August $37 calls cost $0.72, which is about 2% of the value of the ETF's shares. If XLF makes a run higher, which I think it will, the $37 calls will more than double, in my view.
In addition, when XLF runs higher I actually expect the implied volatility (IV) to move higher with the underlying, which should add a tail wind to these calls.
Trade:
Buy to open 1 XLF Aug. 20 $37 call for $0.72.
At the time of publication, Sebastian had no positions in any securities mentioned.