OptionsHouse

Options Trading News

December 20, 2012  Thu 2:14 AM CT

FXI: SEE CHART GET CHAIN FIND STRATEGIES
A bearish strategy led yesterday's option volume in the iShares China 25 Index Fund even as it trades near 52-week highs.

optionMONSTER systems show that the big trade came in the March expiration. A trader bought 10,000 March 37 puts for the ask price of $0.79 and sold 10,000 March 42 calls for the bid price of $0.67. The volume at each strike exceeded the open interest at the start of the session, so this is a new combination spread.

The trade cost $0.12 to open, plus the margin requirements. This could be an outright bearish play or a collar position. The latter would have been done to hedge a long position in FXI shares, protecting against a potential pullback but also limiting the upside through the short calls. (See our Education section)

The FXI was down fractionally yesterday at $39.46. Shares bounced off long term support at $32 in early September, and Tuesday's close was the exchange-traded fund's highest since mid-March.
Share this article with your friends


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

Premium Services

Webinar Recording

Turbo Charge Your Trading Profits

Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

View more education articles »