Equity bulls proceed to run as the fourth quarter kicked off and one other new all-time excessive was printed this morning in the S & P 500 , led by the synthetic intelligence theme. With a continued noisy backdrop in the inventory market and the authorities now on its third day of one other shutdown, I wish to look the place no person else is wanting. This options commerce will deal with the present dispersion amongst the S & P 500’s 11 sectors. I imagine power is buying and selling at a low cost and I wish to use options on XLE to seize this lagging 2025 sector. Energy has had a super five-year run, however buyers have been cautious in 2025 as uncertainty swirls round policymakers. The new administration has been clear with their mantra of “Drill baby, Drill”, but the main names in power have been combined and sector as a complete has been a bigtime laggard on a yearly perspective. Traders haven’t expressed any concern about the present shutdown as the VIX stays tethered to 16 and fairness markets proceed to soften increased. In addition, the authorities shutdown might additional solidify the Fed’s urge for food to chop rates of interest as the administration has said that they may make the most of this shutdown to additional cut back authorities jobs, assume “DOGE 2.0.” It is vital to keep in mind that the broadly used power ETF (XLE) has a heavy weighting to simply three leaders in the sector: Exxon (XOM) , Chevron (CVX) , and ConocoPhillips (COP) . These three names make up almost 50% of the publicity in XLE. I’m snug with this excessive overweighting as Exxon is a fan favourite in power and in addition is a holding in my Essential 40 ETF (ESN) and I imagine that every one three of those power names are indispensable to the U.S. financial system. I wish to use a danger reversal to both be put to further power publicity or to seek out a no-cost technique to seize upside in the third worst sector in 2025. The commerce Sold the Nov. 21 $89 XLE put for $2.55 Bought the Nov. 21 $90 name for $2.50 This unfold was placed on for a very slight credit score of $0.05 or $5. XLE was buying and selling round $89 when this unfold was executed. An investor have to be ready to personal XLE at $88.95 in the occasion the places get assigned at expiration. DISCLOSURES: Kilburg is brief places and lengthy calls in XLE, expiring Nov 21 All opinions expressed by the CNBC Pro contributors are solely their opinions and don’t mirror the opinions of CNBC, NBC UNIVERSAL, their mother or father firm or associates, and should have been beforehand disseminated by them on tv, radio, web or one other medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click right here for the full disclaimer.