Options Trading News

December 6, 2012  Thu 11:09 AM CT

Traders are selling puts in iShares Emerging Markets Fund as it continues to move higher.

There is considerable options action in the EEM this morning, but most of the volume is below open interest and could be opening or closing transactions. One trade that does stand out is the December 42.50 puts, the regular monthly options that expire in two weeks.

A trader sold 9,000 of those contracts for the bid price of $0.72 in volume was almost twice the open interest at the strike and therefore a new position, according to optionMONSTER's scanners. The put seller is betting that the EEM will remain above the $42.50 strike price in the coming weeks. (See our Education section)

Yesterday we noted a large purchase of a February put spread, so it appears that big traders are looking for the EEM to hold up in the next few weeks but possibly get hit by the so-called fiscal cliff into the beginning of 2013.

The EEM is up 0.47 percent to trade at $42.54. The exchange-traded fund is within yesterday's range but today is on pace for the highest close since mid-April.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. 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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