Spread looks for Russia rebound
Traders are looking for the Market Vectors Russia Fund to rebound in coming months.
optionMONSTER's Heat Seeker monitoring system detected the purchase of 7,000 February 18 calls for $0.46 and the sale of 7,000 February 20 calls for $0.13 on Friday. Volume was far above the open interest in both strikes, showing that this is new positioning.
This vertical spread cost a net $0.33 to open and is looking for RSX to rally above $18 by expiration in mid-February. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $20. (See our Coaching section)
RSX fell 4.45 percent to $16.74 on Friday. The exchange-traded fund has fallen nearly 5 percent since Turkey shot down a Russian warplane last Monday is still up 8 percent in the last three months.
Total calls in the fund outnumbered puts by a bullish 3-to-1 ratio on Friday.
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