Huge put sales topped option trading in the iShares FTSE China 25 Fund yesterday.
First a trader sold 10,000 January 2014 34 puts for the bid price of $1.41 in volume that was well above the strike's previous open interest of 3,075 contracts. A little over an hour later, 50,000 March 39.50 puts were sold for $0.58 against open interest of 2,256, according to optionMONSTER systems.
The put sellers are betting that the exchange-traded fund will remain above their respective strike prices. The traders collect the risk premium in exchange for the potential for having to buy shares if they are below those levels by the January 2014 and March expirations. (See our Education section)
The FXI was unchanged on the day, finishing at $40.63. Thursday's close was just below that from the first day of 2013. Shares have been trending higher from support at $32 in early September.
Options Trading News
Related Stories
FXI
Index, ETF option volumes near midday
June 17, 2013
Total option volume has reached 5.6 million contracts so far today, dominated by major indexes and ETFs, according to optionMONSTER data systems.
FXI
Three-way play is bullish on China
June 17, 2013
A large three-way combination trade is bullish on the iShares China 25 Fund, looking for today's bounce to continue through mid-September.
Social Media
Follow optionMONSTER for news and updates
Premium Services
-
Semi-active traders looking for simple calls and spreads (5 per week).
Learn More -
Entry-to-mid level traders looking for full circle trade analysis (1 per week).
Learn More -
Tailored, one-on-one education designed and led by Jon & Pete (3 months and up)
Learn More
Free Webinars
View archived webinars »Education & Strategy
Why education is key to options
People get into option trading for a number of reasons, but there are three primary motivations: to increase income, to...
