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October 23, 2012  Tue 2:14 AM CT

EEM: SEE CHART GET CHAIN FIND STRATEGIES
The iShares Emerging Markets Fund rose yesterday, but a long-term strategy is bearish.

The EEM closed at $41.90, up 0.96 percent but not quite matching its morning highs. Shares of the exchange-traded fund are in the middle of their range of the last five weeks.

A trader bought 10,000 September 2013 28.50 puts for $2.88 and sold 10,000 September 2013 45.50 calls for the bid price $1.96, according to optionMONSTER's systems. Open interest at the two strikes was 53 and 1 respectively, so this is a new combination trade.

The bearish position cost $0.92 to open, which would be lost if the EEM remains between the two strikes, with further risk above $45.50. This could also be a collar on long shares, protecting against a possible move lower. (See our Education section)

The option volume topped 217,000 contracts, essentially split between calls and puts. That compares to the daily average of 111,000.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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