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

Premium Services

Education & Strategy

The Movement of Delta

In our last column, we spoke about delta. You might remember that we discussed what delta was and what factors affected or changed delta. As you recall, we stated that three factors will have an effect on delta. They were movements of time, volatility, and underlying price. Today, we want to take a further look into the change of delta, this time focusing on change due to the movement in the underlying price. 

View more education articles »