Intermediate Trade: Energy Sector Fund

Energy Select Sector Fund (XLE) has been part of one of the worst-performing sectors since the middle of December. It's now through the 50- and 200-day moving averages. While I think the stock could go lower, I think the selloff in this sector is stretched and would be a buyer of a bull call calendar.

The reason I like a call calendar is that while implied volatility is moderately high, term structure (how different months relate to one another) is inverted. I can sell near-term March premiums at a higher volatility than what it costs me to own April....60 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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