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February 13, 2013  Wed 9:10 AM CT

EPI: SEE CHART GET CHAIN FIND STRATEGIES
The WisdomTree India Earnings Fund has pulled back from multi-month highs, but one trader sees a limit to further downside.

optionMONSTER systems show that a trader sold 6,000 July 17 puts for $0.30 and $0.35. The volume was above the strike's open interest of 5,063 contracts, indicating that this is a new position.

This put selling is a bet that the EPI will remain above $17 through expiration in five months. The trader is also showing the willingness to buy shares of the exchange-traded fund if they are below that strike price. (See our Education section)

The EPI currently trades at $19.48, unchanged on the day. Shares of the fund had been trending higher from below $16 since last May and were above $20 into the first day of the month, but they have fallen since then.

More than 6,250 EPI options have changed hands so far today, compared to a daily average of 860. Almost all of the action was in those July 17 puts.
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Timing the Trade

Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  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.

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