OptionsHouse

Options Trading News

December 4, 2012  Tue 2:45 AM CT

EWY: SEE CHART GET CHAIN FIND STRATEGIES
The iShares MSCI South Korea Fund has been bumping up against resistance, but yesterday's option activity was dominated by a downside trade.

A trader bought 6,000 December 54 puts for the ask price of $0.09, according to optionMONSTER's Depth Charge system. The previous open interest at the strike was just 81 contracts, so this is clearly a new position.

The EWY was barely higher at the end of the day, closing at $59.65. The exchange-traded fund rose above $60 during the session, its highest level since early October and at resistance going back to its 52-week high of $61.57 on April 4. Shares were down at support at $56 two weeks ago.

Yesterday's long puts were not tied to any stock trades identified by our systems, so they could be an outright bearish play looking for the EWY to drop to prices last seen in July. This could also be hedging against a long position established at an earlier time. (See our Education section)
Share this article with your friends


OptionsHouse

Premium Services

Education & Strategy

Using spreads to minimize risk

Last week we discussed the risk vs reward profile of a debit call spread in Wells Fargo (WFC). This week we will run thru the risk vs reward of selling a credit put spread to achieve the same exposure of that debit call spread.

View more education articles »