XLV healthcare ETF calls dominated Thursday’s options flow as traders rotated hard into an underperforming sector, buying roughly 5,300 calls in the Health Care Select Sector SPDR Fund against just over 1,000 puts, according to ThinkOrSwim data. Of the $13 million traded in the fund, $11 million was tied to calls.
| Asset | Options Premium | Call Share | Notable Detail |
|---|---|---|---|
| XLV (ETF) | $13 million | ~85% | ~5,300 calls vs ~1,000 puts |
| UnitedHealth (UNH) | $135 million | 87% | Put/call ratio 0.48; 162,000+ calls traded |
| Eli Lilly (LLY) | $145 million | >67% | 10,500+ calls bought; stock up 4%+ |
| XLF (Financials ETF) | High volume | ~50% | 380,000 options; calls and puts evenly split |
The move came as the Dow set a record on Thursday, powered by sectors that have spent most of 2024 lagging behind a tech-led market. Healthcare was the standout. Insurers UnitedHealth Group, Humana, and Centene all pushed toward one-year highs. UnitedHealth closed just below the peak it set in May.
What the XLV Healthcare ETF Calls Signal
The XLV healthcare ETF calls picture is about as one-sided as options flow gets. More than 162,000 call options traded on UNH alone, with a put/call ratio of 0.48, according to options flow data. A reading below 1.0 means more calls than puts; 0.48 is heavily skewed.
Traders also bought more than 10,500 calls in Eli Lilly, more than twice as many as they sold and three times the put count. Premium traded hit $145 million, with calls taking more than two-thirds of it. Lilly gained over 4% to near all-time highs reached a week earlier.
The XLV fund itself is not a small vehicle. It carries roughly $37.4 billion in total net assets and an expense ratio of just 0.08%, making it cheap to use as a broad sector position. It has been trading since December 1998, so there is deep liquidity and a well-established options market around it.
Healthcare vs. Financials: A Tale of Two Rotations
The contrast with financials was sharp. The State Street Financial Select Sector ETF (XLF) drew nearly 380,000 options trades on the day, a far larger absolute volume. But the premium was roughly evenly split between calls and puts, and more calls were sold than bought, per SpotGamma data. That kind of mixed positioning does not read as conviction. It reads as hedging.
Healthcare positioning read differently. Traders were not hedging a financial sector rally they were already long. They were expressing a directional view: healthcare catches up.
That thesis has a few things going for it. Valuations in the sector have compressed relative to tech over the past two years. Defensive earnings profiles start to look attractive when growth stocks get choppy. And weight-loss drug momentum, with Lilly as the clearest proxy, gives the sector a growth narrative it rarely carries.
Still, one session of call buying does not make a trend. The XLV healthcare ETF calls surge to watch now is whether the same positioning repeats over the next several sessions, or whether Thursday was opportunistic traders chasing a single-day move. The technical test comes if XLV can hold gains and UNH pushes through that May high.
