U.S. Markets closed

Bearish put spread targets Brazil ETF

Chris McKhann (chris.mckhann@optionmonster.com)

The iShares Brazil Fund is facing a large downside position as shares slip lower today.

A trader bought 6,100 June 55.50 puts for the ask price of $1.76 and sold 12,200 June 52.50 puts for the bid price of the bid price of $0.74, according to optionMONSTER's Depth Charge system. The volume was about 6 times the previous open interest at each strike, indicating new activity.

This vertical spread , also known as a ratio because one leg of the trade has twice as many contracts as the other, cost $0.28 to open. That amount is the most that can be lost if the EWZ is above $55.50 at the expiration in mid-June, while the maximum gain would be realized with shares at $52.50 at that time. (See our Education section)

The EWZ is down 1.06 percent to $55.12, leaving shares in the middle of their recent range. The exchange-traded fund touched support at $52.50 last week, its lowest level since early December.

More From optionMONSTER