Despite hopes for an economic recovery underlying the market's recent rebound, options traders have taken a grim view of the S&P Retail SPDR (NYSE: XRT). Over on the International Securities Exchange (ISE) and Chicago Board Options Exchange (CBOE), puts bought to open have more than tripled calls purchased during the prior two weeks, with the XRT's 10-day put/call volume ratio arriving at 3.59. Furthermore, the trust's Schaeffer's put/call open interest ratio (SOIR) of 3.06 indicates that puts more than triple calls among options with less than three months until expiration.

This preference for puts has carried over into today's trading, with XRT's September 20 strike attracting heavy volume. So far, more than 50,000 contracts have changed hands on open interest of 46,876 contracts, hinting that some of today's volume might translate into fresh open interest. Of interest amid this activity, two blocks totaling 50,000 contracts traded at 12:05 p.m. Eastern time on the American Stock Exchange (AMEX). These blocks traded at $0.35, between the bid and ask prices at the time.

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