Small-cap fund faces downside trade
Chris McKhann | [email protected]
More than 303,000 IWM options have changed hands so far today, already almost at its total daily average for the last month. Topping the action is a three-way combination trade in the March Quarterly strike.
optionMONSTER systems show that a trader bought 10,000 of the 86 puts for $1.41 and, at the same time, sold 10,000 of the 80 puts for $0.43 and 10,000 of the 94 calls for $0.41.
The volumes were more than open interest at all but the lower put strike, but this appears to be a put spread collar. This would suggest that the trader is paying $0.57 to open this position against long shares to protect against a pullback, at least down to $80.
The IWM, which tracks the small-cap Russell 2000, is up 0.28 percent to $89.22 in midday trading. Shares have been climbing from support at $76 last tested in mid-November and closed at $90.05 on Tuesday, a new all-time high.