What's behind put play in global ETF

Chris McKhann (chris.mckhann@optionmonster.com)
August 15, 2013

A large put trade tops today's option activity in the global iShares MSCI EAFE Fund.

optionMONSTER systems show that a trader sold 7,658 September 56 puts for the bid price of $0.19 against open interest of 65,000. At the same time he or she bought 8,706 October 60 puts for their ask price of $1.21. The latter volume was twice the open interest at that strike, indication new activity.

This could be a new diagonal spread but is far more likely that the trader is rolling a position out in time and up in strike to gain much greater delta , or exposure to a further drop. (See our Educatio n section)

The EFA, which tracks stock indexes in Europe, Asia, and Australia, is down 1.13 percent to $61.40. The exchange-traded fund was above $62 on Wednesday, its highest level since gapping down from highs in late May.

Total option volume of 44,200 contracts exceeds the EFA's full-session average for the last month.

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