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S. Korea fund seen holding firm

Mike Yamamoto (mike.yamamoto@optionmonster.com)

A large trader is betting that downside will be limited in the iShares South Korea Fund as shares hold most of yesterday's gains.

optionMONSTER systems show that 6,000 October 62 puts were sold for $1.01 in 3 minutes today against previous open interest of just 687 contracts at that strike. That single trade makes up almost all of the EWY's volume so far today, which is more than 4 times its full-session average for the last month.

The put selling is a bet that the exchange-traded fund will hold above $62 in the next few weeks. The trader also faces the potential obligation of having to buy shares if they fall below that strike price by expiration on Oct. 18. (See our Education section)

The EWY is down fractionally to $62.28 this morning. It was above $64 two weeks ago but has been trading around $62 since. The fund was at a 52-week low under $50 in late June.

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