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November 11, 2011  Fri 12:20 PM CT

EFA: SEE CHART GET CHAIN FIND STRATEGIES
The EFA global exchange-traded fund has been quite volatile of late, and a big position is apparently looking to profit from that trend.

The iShares MSCI EAFE Index Fund, which covers Europe, Australia, and Asia, is up 2.67 percent to $51.89. The EFA was above $55 at the end of October after rebounding from a 52-week low of $45.45 at the beginning of that month.

More than 138,000 EFA options have traded today, more than twice the fund's daily average. Almost all of that volume is in a single put spread. (See our Education section)

optionMONSTER's systems show that 55,000 contracts traded each in the January 49 and 43 puts. The 43s went for $1.07 and were apparently bought, while the 49s traded for $2.27 and look sold.

This is a bull put spread or credit spread. The term "bull" is a bit misleading in this case, as the spread takes a maximum profit of $1.10 if the EFA remains above $49 through expiration. Its losses are capped if it trades anywhere below $43, but the potential losses at that point would be $4.90.
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