What's behind puts in Europe-Asia ETF
Chris McKhann | firstname.lastname@example.org
More than 52,000 EFA options have changed hands, already exceeding its total daily average in the last month. Nearly all that volume is in one 2013 trade in the exchange-traded fund, which tracks stocks in Europe and Asia.
A trader bought 25,510 June 40 puts for the ask price of $1 against no open interest at that strike, according to optionMONSTER's Depth Charge system. Seconds later 25,510 June 35 puts were sold for $0.51 against open interest of more than 31,000 contracts, so that could have been an opening or closing transaction.
The EFA is down 1.14 percent this morning to trade at $53.36. It traded above $55 last week, the fund's highest level since its 52-week highs in March. Shares were down at support at $45 in early June.
The trader could be rolling puts to the higher strike or opening a new vertical spread. In either case, they end up long those June 40 puts. That is quite far out of the money, which may suggest that this is an outright bearish play as opposed to a hedge against a long position in the fund. (See our Education section)