OptionsHouse

Options Trading News

March 14, 2014  Fri 12:11 PM CT

EEM: SEE CHART GET CHAIN FIND STRATEGIES
A huge put trade dominates heavy option volume in the iShares Emerging Markets Fund ahead of this weekend's secession vote in Crimea.

optionMONSTER Depth Charge system shows that a block of 125,000 March 39.50 puts traded for $1.24 against open interest of 186,444 today. At the same time, a block of 125,000 April 39 puts was bought for $1.47, above the listed ask price, in what is clearly a new position because volume well above that strike's previous open interest of 91,000 contracts.

This could be a new diagonal spread, but the trader is more likely rolling forward the March puts, which expire a week from today. In that case the trader is closing the near-term position and opening new puts at the lower strike a month later.

Given that the puts are in the money, this is very likely an outright bearish play rather than a hedge on a long position. (See our Education section)

The EEM is up 0.81 percent to $38.50 in afternoon trading. The exchange-traded fund was above $40 last week but near $37 at the start of February.

Total option volume in the name already tops 600,000 contracts so far today, more than double its daily average for the last month. Overall puts outnumber calls by more than 4 to 1.
Share this article with your friends


OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Using spreads to minimize risk

Last week we discussed the risk vs reward profile of a debit call spread in Wells Fargo (WFC). This week we will run thru the risk vs reward of selling a credit put spread to achieve the same exposure of that debit call spread.

View more education articles »