Options in financial ETF becomes a crowd favorite (at Reuters)

By Doris Frankel CHICAGO, July 25 (Reuters) - Traders flocked on Friday to put options in an exchange-traded fund tracking the performance of the financial sector on renewed fears that credit problems could create further fallout in the battered sector. The increased number of bearish bets in the Financial Select Sector SPDR fund XLF.A may also be the result of U.S. regulators' crackdown on short selling, affecting the shares of 19 major financial firms. Roughly one million options traded in the XLF, with puts outnumbering calls by a factor of 1.71, topping its normal level of 840,000 lots, according to Trade Alert. The XLF, which holds the financial-related components from the Standard & Poor's index, was the option crowd's top favorite, data from option analytics firm Trade Alert showed. "The put trading we are seeing in... [read full story]