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July 19, 2013  Fri 11:08 AM CT

EWG: SEE CHART GET CHAIN FIND STRATEGIES
The iShares Germany Fund doesn't often light up our tracking systems, but today it saw an unusually large call sale.

More than 8,200 options have traded in the EWG, compared to a daily average of just 686 in the last month. Almost all of that volume was in a single trade.

optionMONSTER's scanners detected the sale of 8,192 August 26 calls in one print for $0.57. This is clearly a new position, as open interest in the strike was only 169 contracts before the trade appeared.

The calls were almost certainly sold against a long position in EWG stock because those contracts are in the money. The trader in that case is betting that the exchange-traded fund will see little upside in coming months but not much downside either, as covered-call strategies work best in a range-bound market. (See our Education section)

The EWG is up fractionally to $26.13 in midday trading. It hit a two-year high at $26.84 a month ago and bounced off support at $24 at the start of this month.
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When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

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