Options Trading News

Australian stocks are bouncing, but one investor apparently thinks that they're dead in the water.

optionMONSTER's monitoring systems detected the sale of 2,750 January 21 puts on the iShares MSCI Australia Index Fund for $2.05, and 2,750 January 21 calls for $2.02. Equal numbers of contracts traded at the same time in the July 21 calls and the July 21 puts for $1 and $0.55 respectively, but volume was below open interest at each strike.

It appears that the investor had previously sold the July options as part of a so-called short straddle, which profits from a sideways movement. He or she then closed that position and rolled it forward by six months, collecting an additional credit of $2.52. (See our Education section)

The EWA rose 1.25 percent yesterday to close at $21.94 but has lost more than 13 percent of its value in the last year as investors worried about a slowing global economy. As a producer of commodities like coal and iron ore, Australia has been hurt by slowing industrial activity in China and financial crisis in Europe.

Overall option volume in EWA was 9 times greater than average in the session.