Trade sees Australia fund standing still
David Russell | email@example.com
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.