Options Trading News

June 26, 2012  Tue 12:11 PM CT

A four-way put spread dominates the options action in the iShares Emerging Market Fund.

The EEM trades at $37.30, up 0.57 percent on the day and not far from a long-term support level. The $37 level has held for all but a couple of closes going back to October, when the exchange-traded fund came off its 52-week low.

The big trade involved 18,500 each of the July 35 and 32 puts and the August 35 and 32 puts, all traded at the same time.

In the July expiration, the 35 puts traded for $0.37 and the 32s were bought for $0.09. The volume was much less than open interest at both.

In August the 35 puts were bought for $0.79 and the 32s sold for $0.30. Volume was below open interest in the 35s but above it in the 32s.

The trading data indicates that this is a roll of that 35/32 put spread to August from July. The trader ends up paying $0.21 for continued exposure down to that $32 level. (See our Education section)
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I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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