Options Trading News

July 19, 2013  Fri 11:08 AM CT

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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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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