Huge volume in emerging markets ETF

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The iShares Emerging Markets Fund saw some large and unusual trades amid extraordinarily heavy option volume yesterday.

More than 1.1 million EEM options traded on the day, catapulting it to No. 2 on the overall volume list, compared to its daily average of just 162,000 in the last month. The action was confusing as there were several huge trades and a number of broken prints, but puts ended up outpacing calls by almost 4 to 1 on the day.

The big trade of the day was rolling a long-put position forward by a month and to a higher strike, as 111,128 March 43 contracts were sold for the bid price of $0.06 against open interest of more than 210,000. Seconds later, 213,067 April 43.50 puts traded for the ask price of $0.61 in volume that was far above that strike's open interest of under 20,000, so it is a new position.

The other unusual trade appears to be a big--and rather odd-- short strangle . That trade involved 172,029 April 42.50 puts sold for $0.22 against open interest of more than 184,000 contracts and 122,621 December 51 calls sold for their bid price of $0.32. (See our Education section)

The EEM fell 0.54 percent to close yesterday at $43.89. It was up at a 52-week high of $45.33 on the first trading day of the year and found support at $42.60 coming into this month. 

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