Oil exchange traded funds continued their rocky ride Thursday as U.S. Oil Fund (NYSEArca: USO) slipped more than 1%, but some options traders are positioning for gains in energy sector ETFs.

Energy Select Sector SPDR Fund (NYSEArca: XLE) was down 0.3% on Thursday after rallying the previous session. [Energy ETFs Rise on Oil, Halliburton]

Energy stocks advanced nearly 2% on Wednesday and buyers were seen on the strength in Energy Select Sector SPDR calls, said Paul Weisbruch, vice president of ETF/options sales and trading at Street One.

“The June 74 calls were snapped up, which are short dated options and also in the money, so these buyers are obviously looking for additional strength in the sector,” Weisbruch wrote in a note Thursday.

Energy Select Sector SPDR Fund (NYSEArca: XLE)

Editor’s note: For more information on Street One ETF research, contact pweisbruch@streetonefinancial.com.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.