Options Trading News

November 12, 2013  Tue 4:14 AM CT

A gigantic put trade is apparently looking for a drop in the iShares Emerging Markets Fund.

optionMONSTER systems show that 790,000 EEM options changed hands yesterday, making it second in total volume only to only the SPDR S&P 500 Fund. Amazingly, most of that volume is in one trade.

A trader sold 210,953 November 42.50 puts for $1.60 against previous open interest of 238,704. At the same time, he or she bought 248,663 December 41.50 puts for the ask price of $1.55 in volume well above that strike's open interest of roughly 76,000, so it is a new position.
Although it is possible that these puts are a hedge on long stock, it is unlikely because they are in the money. So it appears that this trader is rolling a bearish position out a month and to a lower strike price. (See our Education section)

The EEM fell 0.51 percent to $40.95 yesterday, its lowest close since the end of September. The exchange-traded fund was testing $44 just three weeks ago.
Share this article with your friends

Related Stories


Quick profits in emerging markets

November 4, 2015

Global growth is back in play, and traders are already racking up the winners in the iShares MSCI Emerging Markets Fund.


Premium Services

Education & Strategy

The art of trading

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.

View more education articles »