OptionsHouse

Options Trading News

December 5, 2012  Wed 12:20 PM CT

EEM: SEE CHART GET CHAIN FIND STRATEGIES
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)
Share this article with your friends


OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

Options Academy: At the Break

So far, my articles have taken you through a logical progression of option theory and fundamental concepts of options. As of yet, I have not mentioned a single strategy and for a good reason! The actual application of a strategy should come AFTER you learn about the option product itself.

View more education articles »