We have spoken about the imminent earnings season for equities as we head into the end of January and beginning of February, and yesterday we saw some sector activity in options that makes us want to dig deeper.

XLP (SPDR Consumer Staples, Expense Ratio 0.18%) February 42 puts were active, and volume in the underlying ETF topped 20 million shares yesterday versus ADV of 8.2 million shares.

It appears that options players are expressing caution in the sector in the near term. Top holdings in this popular sector fund are PG (13.94%), KO (10.15%), PM (9.36%), WMT (8.06%), and PEP (4.79%), and these individual names are slated to report earnings anywhere between 1/24 and 2/20/14, so the February options expiration cycle would capture these earnings events.

XLP is by far the largest sector-oriented ETF in the U.S.. Consumer Staples space, with $6.7 billion in assets under management.

Other prominent names in the space that have difference index methodologies than XLP and thus the specific exposures will vary from fund to fund include VDC (Vanguard Consumer Staples, Expense Ratio 0.14%), FXG (First Trust Consumer Staples AlphaDEX, Expense Ratio 0.70%), IYK (iShares U.S. Consumer Goods Sector, Expense Ratio 0.48%), RHS (Guggenheim S&P 500 Equal Weight Consumer Staples, Expense Ratio 0.50%), PSL (PowerShares Dynamic Consumer Staples Sector, Expense Ratio 0.60%), as well as the newly launched FSTA (Fidelity MSCI Consumer Staples Index, Expense Ratio 0.12%).

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