Calender spread in emerging markets
Chris McKhann | [email protected]
optionMONSTER systems show that 15,000 December 43 calls were sold for the bid price of $0.33 against open interest of more than 94,000. Seconds later, 15,000 March 43 calls were bought for the ask of $1.53 in volume that was above the open interest at that strike.
The trader could be setting up a long calendar spread, which would be designed to profit if the EEM is right around $43 at the December expiration. This could also be a roll with just two weeks left before the December expiration, selling the long calls in that expiration and opening a long-term position for more time to profit. (See our Education section)
The EEM closed at $42.79 on Friday, up 0.3 percent on the day. The exchange-traded fund bounced off support at $40 three weeks ago.