Options Trading News

December 10, 2012  Mon 2:14 AM CT

The iShares Emerging Markets Fund attracted a large call trade on Friday as the ETF saw its highest close since early April.

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.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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