The iShares Emerging Markets Fund is on pace for its highest close since May 1, but a large bearish position tops its option activity today.
The EEM is up 1.53 percent to $42.53 in afternoon trading, just off its session high. The exchange-traded fund bounced off support at $40 three weeks ago and is now up against resistance.
A trader bought 16,709 February 40 puts for $0.78 and sold the same number of February 36 puts for the bid price of $0.23, according to optionMONSTER's tracking systems. The volume was well above the open interest at each strike, so this is a new position.
This put spread cost the trader $0.55, which will be lost if the EEM remains above $40 through expiration in mid-February. The maximum profit of $3.45 would be realized if shares are below $36 at that time. Shares haven't been below that price since the October 2011 lows. (See our Education section)
Options Trading News
Related Stories
EEM
Index, ETF option volumes near midday
May 14, 2013
Total option volume is strong today with 6.8 million contracts changing hands as the typical indexes and ETFs dominating the action, optionMONSTER data systems show.
EEM
Bearish play in emerging markets
May 10, 2013
The iShares Emerging Markets Fund fell a day after posting its highest close since Feb. 1, and one large trader is apparently looking for more downside.
EEM
Index, ETF option volumes at midday
May 8, 2013
Total option volume tops 5.9 million contracts so far today as bullish sentiment again pervades the major indexes and ETFs, according to optionMONSTER data systems.
EEM
Index, ETF option volumes near midday
May 1, 2013
Total option volume has reached 5.5 million contracts so far today, with some different names showing heavy activity in the major indexes and ETFs on optionMONSTER's data systems.
Social Media
Follow optionMONSTER for news and updates
Premium Services
-
Semi-active traders looking for simple calls and spreads (5 per week).
Learn More -
Entry-to-mid level traders looking for full circle trade analysis (1 per week).
Learn More -
Tailored, one-on-one education designed and led by Jon & Pete (3 months and up)
Learn More
Education & Strategy
So why do we bother with spreads?
Trading options allows for far deeper levels of complexity than stocks. And while you may never fully venture all the...
