Late last week we saw the emergence of put buyers in XME (SPDR S&P Metals and Mining) as the exchange traded fund failed to close at recent highs after mid morning Friday strength, and finished down 0.61%.
XME had a strong showing last week, rising over 15% from the previous week’s closing levels and challenging the $55 a share level briefly. The entrance of put buyers may indicate that options players believe the recent surge is overdone and due for a pullback, or perhaps these put buyers are long the underlying ETF and are eager to protect recent gains.
As one might expect, since XME tracks the S&P Metals and Mining Select Industry Index which is composed of equities that derive revenues from mining activities in both precious and industrial metals, the fortunes of the ETF are often tied to the spot prices of the metals themselves.
In several recaps from last week we highlighted strength in both gold and silver ETFs and a follow through was evident in non-precious (industrial) metals including copper (see JJC), aluminum (ALUM), and lead (LD) for instance.
Currently, top holdings of XME are WOR (3.27%), CRS (3.23%), RTI (3.16%), SCHN (3.15%), and CMC (3.13%).