One trader thinks the options on global stocks are pricing in too much of a move.
optionMONSTER's tracking programs detected the sale of 5,000 November 52 puts on the
iShares EAFE Index Fund for $2.13. An equal number of November 52 calls traded at the same time, also sold, for $2.34.
The transaction appears to short straddle, looking for EFA to remain around $52 into expiration. They'll also make money from the passage of time if actual movements are less than less than the implied volatility. The implied volatility of those options is 23 percent versus 30-day historical volatility of 19 percent. In the last 10 days, it's moved at only an 8.5 percent annualized pace.
EFA rose fractionally, closing up 0.06 percent to $52.13. The stock remains near last week's peaks, its highest level since early May. Shares were down below $47 in early June before rallying.
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