OptionsHouse

Options Trading News

March 27, 2014  Thu 9:48 AM CT

EEM: SEE CHART GET CHAIN FIND STRATEGIES

Emerging markets have been coming to life, and the bulls are sticking with the sector again today.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 10,000 December 42 calls in the iShares Emerging Markets Fund for $1.80. They also sold 10,000 December 34 puts for $1.25 and 15,000 of December 46 calls for $0.64. Volume exceeded previous open interest at all three strikes was more than the, so this was a new opening position.

The trader received a credit on the trade and accepts the risk of being forced to sell 500,000 shares if EEM goes above $46. He or she is also on the hook to buy 1 million shares below $34. The maximum gain comes at $46 level. (See our Education section.) Given the unusual risk/reward, it was probably done against an existing position in the fund.

EEM rose 1.25 percent to $40.40 in morning trading, and is up 5 percent in the last week. It's now at its highest price since Jan. 22, and bounced off support at $38 last week.

Share this article with your friends


Related Stories

EEM

Emerging markets face bearish play

January 22, 2015

The iShares Emerging Markets Fund is at its highest level in nearly two months, but a huge trade is positioning for a potential pullback.

EEM

Big call selling hits emerging markets

January 14, 2015

A large investor is selling calls in the iShares Emerging Markets Fund, apparently seeing little upside potential in coming weeks.

EEM

Midday index, ETF option volumes

January 12, 2015

Total option volume is running right around average at 5.5 million so far today, with mixed sentiment in the primary indexes and ETFs, according to optionMONSTER data systems.

Invest Like a Monster - Las Vegas: March 13-14

Premium Services

Free Webinar

Option Money Machine Winter Classic

Education & Strategy

The rolling technique

In the January 7th edition of Advantage Point, we initiated the purchase of a second week-out GOOGL 535 put at...

View more education articles »