Huge call spread in Treasury ETF

optionMONSTER

The second-largest trade in the option market yesterday was a bullish play in the iShares 7-10 Year Treasury Bond Fund.

optionMONSTER's Heat Seeker system shows that 44,760 September 104 calls was bought in one print for the ask price of $0.60. At the same time, a same-sized block of September 106 calls was sold for the bid price of $0.15. Volume dwarfed the previous open interest in each strike, so this is clearly new positioning.

The trader is opening a bullish call spread that is looking for the IEF to rebound by the end of summer. He or she is spending $0.45 for the potential to make $1.55. (See our Education section)

The IEF was down fractionally at $102.73 yesterday. The exchange-traded fund was above $104 last week, its highest level since last June.

Just over 90,000 IEF options changed hands yesterday, compared to previous open interest of 56,916 contracts and a total average volume of 1,064.

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