XLE Call Spread Trade Sees 1,796 Contracts and 6.2% Early Gain—Technical Indicators Remain Strong, But Skew Points Bearish
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High-Volume XLE Call Spread Nets Buyers a 6.2% Gain on Day One
On March 24, 2026, a major options trade hit the tape for State Street’s Energy Select Sector SPDR ETF (XLE). The trade—a 1,796-lot 60-62.5 December call spread—stood out for both its size and quick mark-to-market profit. Priced at a VWAP of $1.20, the value of the spread moved to $1.28 within just two hours, giving buyers an average paper gain of $0.07 (6.2%) as the underlying ETF jumped $0.53 from $60.67 to $61.20.
The deal’s structure and timing are both worth examining more closely.
Trade Details: Structure, Payoff, and Potential Rewards
| Expiration | Strike Prices | Contracts | Trade Price (VWAP) | Stock Reference | Buyer’s Max Outlay | Potential Max Profit |
|---|---|---|---|---|---|---|
| 18-Dec-26 | 60/62.5 | 1,796 | $1.20 | $60.67 | $108,000+ | $117,000 ~ |
The trade was initiated for a total cost exceeding $108,000, with the intention to net up to $117,000 in profit if XLE finishes above $62.50 on expiration (December 18, 2026). This payoff profile means the trader is betting on moderate upside: not just a move, but a measured rally above that upper strike.
Looking for more trades like this? Check out the multi-leg options screener for other sizable spreads and strategy ideas.
Technical Indicators Are Bullish: XLE’s Strong Uptrend Outpaces SPY
Key technical readings for XLE currently flash bullish. The ETF closed at $61.20—a 2.63% daily gain—breaking further above nearby moving averages. Over every major timeframe, XLE has outpaced the S&P 500 ETF (SPY).
| Duration | XLE Return | XLE Low | XLE High | SPY Return |
|---|---|---|---|---|
| Today | +2.6% | 59.77 | 61.31 | +0.1% |
| 2 Week | +9.3% | 55.37 | 61.31 | -3.0% |
| 1 Month | +11.7% | 54.12 | 61.31 | -3.6% |
| 3 Month | +38.4% | 43.99 | 61.31 | -4.4% |
| 6 Month | +38.9% | 42.35 | 61.31 | -0.5% |
| 1 Year | +37.3% | 37.25 | 61.31 | +17.6% |
| YTD | +37.7% | 44.49 | 61.31 | -3.6% |
| 3 Year | +69.0% | 37.25 | 61.31 | +72.2% |
| 5 Year | +186.4% | 22.57 | 61.31 | +77.0% |
Technically, the stock price sits 7.3% above its 20-day moving average, 14.5% above its 50-day, and a hefty 34.6% above its 250-day. Trend analysis points to persistent momentum, with all moving averages sloping higher, and recent price action breaking out to new highs. Notably, in the past year, XLE delivered a total return of 37.3% versus SPY’s 17.6%.
Option Skew Indicator Signals Bearish Caution Despite Uptrend
While technicals favor bulls, a look at option market sentiment shows a different story. The 30-day implied volatility skew for XLE currently sits at just the 18th percentile for the past year—historically a bearish reading. The proprietary skew indicator blends forward-looking option prices to gauge sentiment; a lower percentile here means out-of-the-money call premiums are relatively cheap, suggesting less urgency from big-money traders to bet on large upside in the near-term.
Takeaway: Profitable Spread, Mixed Market Signals
This large-volume call spread in XLE has already delivered notable gains within its opening session. The buyer is positioning for moderate, not aggressive, upside through year-end. Technical momentum is in their favor, as XLE remains in a clear uptrend and has outperformed the broad market by wide margins in nearly every recent window. Yet, the options market remains cautious, with volatility skew readings tilting bearish.
If you want to explore more multi-leg trades or analyze similar strategies, check out the Multi-Leg Trade Analyzer for XLE and the multi-leg trades screener.
For now, XLE is a textbook case of momentum facing off with measured options skepticism—raising the question of whether the next move will favor the bulls or vindicate the doubters.
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NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
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Disclosure: This article was generated with the assistance of AI