The iShares FTSE China 25 Fund is giving up some of yesterday's gains, but a huge trade sees a floor beneath the shares in the long term.
optionMONSTER's systems show that a trader sold 25,000 January 2014 32 puts for the bid price of $2.54. The previous open interest was 1,664 contracts, so this is a new position.
The FXI is down 1.48 percent to $36.01 today. Earlier this month the exchange-traded fund had bumped up against resistance at $38 that has been in place since its March highs. Shares were down at support around $32 at the start of September.
Today's put selling is a bet that the FXI will hold above $32 through the expiration in more than a year. It is also a bet that the implied volatility of those puts, now at 30 percent, is too high. The current 30-day historical volatility of the stock is 20 percent and has been above 30 percent only briefly this year, in early July.
Options Trading News
Related Stories
FXI
Index, ETF option volumes near midday
June 17, 2013
Total option volume has reached 5.6 million contracts so far today, dominated by major indexes and ETFs, according to optionMONSTER data systems.
FXI
Three-way play is bullish on China
June 17, 2013
A large three-way combination trade is bullish on the iShares China 25 Fund, looking for today's bounce to continue through mid-September.
Social Media
Follow optionMONSTER for news and updates
Premium Services
-
Semi-active traders looking for simple calls and spreads (5 per week).
Learn More -
Entry-to-mid level traders looking for full circle trade analysis (1 per week).
Learn More -
Tailored, one-on-one education designed and led by Jon & Pete (3 months and up)
Learn More
Free Webinars
View archived webinars »Education & Strategy
Why education is key to options
People get into option trading for a number of reasons, but there are three primary motivations: to increase income, to...
