How Option Pit Founder Mark Sebastian Is Trading the XLF

Mark Sebastian from Option Pit discusses the 2019 January effect, highlighting the influx of sidelined money into the market and the easing of the China-U.S. trade war. He notes the stability in interest rates and the strong performance of North America compared to Asia and Europe. The oil market is seen as a reflection of future economic prosperity, with momentum driving market trends. In the financial sector, Sebastian discusses trading strategies involving XLF, emphasizing the potential for growth as interest rates stabilize.

What is one reason the market is experiencing a 'risk on' environment according to the discussion?

• The resolution of the China-U.S. trade war

• An increase in European economic growth

• A rise in interest rates

• A decrease in global oil prices

How is the recent rally in oil prices described in the discussion?

• A declining market with low momentum

• A bear market within a bull market

• A bull market within a bear market

• A stable market with no significant changes

What is a key factor driving the momentum in the oil market?

• Decreasing demand for oil

• Low sentiment and increased investment

• High liquidity in the market

• Strong economic growth in Europe

What is notable about the XLF's performance according to the discussion?

• It has been unaffected by interest rate changes

• It has shown high volatility in recent months

• It has maintained its 50-month moving average

• It has consistently outperformed the S&P 500

Why does the speaker find the current options on XLF attractive?

• They are priced below their intrinsic value

• They have low implied volatility

• They are expected to decline in value

• They offer high returns with minimal risk