Carter Worth of Cornerstone Macro spoke on CNBC’s “Options Action” about SPDR S&P Metals & Mining ETF (NYSE: XME). He said industrial metals have traded significantly higher recently and he expects to see a catch-up trade in metal stocks. The U.S. Spot Raw Industrial Index has exceeded the peak from 2018 and the XME has not returned to its highs yet. He expects to see a breakout in XME.
Mike Khouw suggested a bullish options trade in the name. He wants to sell the March $33 put for 20 cents to buy the June $37 call for $2.91. The total cost for the trade is $2.71 and it breaks even at $39.71 or 8.53% above the closing price on Friday. If the ETF drops below $33, Khouw is going to have to buy the stock at $33.
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