Big move expected in China ETF
Chris McKhann | email@example.com
optionMONSTER's Depth Charge tracking system shows that 29,450 August 30 puts were bought for the ask price of $0.91 yesterday. This is a new position, as its volume is well above the strike's previous open interest of 17,514 contracts.
Just afterward, a block of 556,600 shares was bought for $34.79. That would make the overall position delta-neutral and therefore focused on a big move in either direction and/or higher volatility than that implied by the options' price. The implied volatility of the puts is 28 percent, just a bit above the FXI's 10-day historical volatility. (See our Education section)
The FXI fell 1.73 percent to $34.70 yesterday. The exchange-traded fund has been trending lower since hitting a 52-week high above $40 in early December.
More than 162,000 FXI options changed hands on the day, more than twice its daily average for the last month.