OptionsHouse

Options Trading News

April 26, 2013  Fri 2:45 AM CT

EWZ: SEE CHART GET CHAIN FIND STRATEGIES
Call selling led yesterday's option activity in the iShares Brazil Capped Index Fund.

More than 13,000 EWZ May 57.50 calls traded, compared to the previous open interest of 4,374 contracts at that strike. Almost all of the volume was sold, with the biggest block of 5,000 going for $0.13.

The calls may have been sold naked with an initial bearish bias. Alternatively, they could have been traded against long shares in a covered call position, which would be bullish up to the $57.50 strike price but not beyond. (See our Education section)

The EWZ gained 0.5 percent yesterday to close at $54.56. The exchange-traded fund has been rising for the last week off its 2013 lows and is now in the middle of its recent range. Shares encountered resistance at the $57.50 level six weeks ago. 
Share this article with your friends


Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

View more education articles »