Big put sale in emerging markets ETF
Chris McKhann | email@example.com
The EEM rose 0.63 percent yesterday to finish at $40.18, its highest close since May 10. Since then shares have bounced between $40 and $37, testing both ends of that range on a number of occasions. Shares were reached a 2012 peak of $44.91 at the end of February.
Though not the largest trade of the day, the action in the November 35 puts was the most unusual as a block of 15,000 contracts was sold for the bid price of $0.64, according to optionMONSTER's systems. The previous open interest at that strike was 1,598, so it was a new position.
The put selling is a bet that the EEM will remain above $35 through that expiration. The trader is willing to buy shares if they are under that level, which the fund has been below only briefly in the last three years at the October 2011 lows. (See our Education section)
More than 236,000 EEM options traded yesterday, compared to a daily average of 138,000 in the last month. Puts outpaced calls by more than 3 to 1.