$XLF bulls score on rising rates

Bullish traders doubled their money in a strong option trade on the SPDR S&P Financial Fund today as Treasury yields continued their recent, sharp gains.

On Oct. 2, Investitute’s tracking systems detected the purchase of 24,722 November $28 calls in one print for $0.44 as part of a bullish spread, selling downside puts alongside the calls, with shares at $27.55. This was clearly a new position, as the call volume was far above the strike’s open interest of 13,538 contracts.

Those calls traded up to $0.89 today, more than twice their original purchase price. The stock rose 2.76 percent in the same time period, illustrating the kind of leverage that can be achieved through options.

Investitute co-founder Pete Najarian cited the purchase of even more bullish options on the XLF, on CNBC’s “Halftime Report” yesterday afternoon.

XLF rallied higher this morning to an intraday high of $28.31 before pulling back with the rest of the market to close at $28.00 even, or down 0.5% on the day. The exchange-traded fund moved higher this week as the yield on the U.S. 10-year note climbed over sixteen basis points in the same time.