The iShares MSCI Mexico Index Fund saw heavy call buying yesterday.
More than 15,000 April 72 calls were bought yesterday as prices rose from $0.96 to $1.20, led by huge prints of 4,866, 4,743, and 3,963 contracts, according to optionMONSTER's Heat Seeker tracking system. The volume dwarfed the strike's open interest of just 44 contracts before the trading began, so these are clearly new positions.
The EWW rose 1.28 percent yesterday to close at $70.98. The exchange-traded fund had been pulling back since hitting an all-time high of $75 on Feb. 1 but bounced after hitting its 100-day moving average on Tuesday.
The calls purchased yesterday, which lock in the price where traders can buy stock, are looking for the EWW to gain roughly 3 percent or more by mid-April. The options could be sold earlier at a profit if their value rises with any rally before then, but they will expire worthless if the shares remain below the $72 strike price. (See our Education section)
This call buying made up 94 percent of yesterday's total option volume in the fund. Overall calls at all strikes outnumbered puts by 15 to 1, a reflection of the session's bullish sentiment.
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