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Limited downside seen in chip fund

OptionMonster Staff (media-support-team@optionmonster.com)

Traders apparently see a floor in shares of the Market Vectors Semiconductor Fund.

OptionMonster's tracking programs detected the sale of 2,500 December 66 puts for $0.85 to $1.05 yesterday. These are clearly new positions, as open interest in the strike was a mere 67 contracts before the session began.

Short puts lock in a price where investors must buy a stock, while letting them collect premium. Traders use the technique when they like a stock and think that the risk of a big drop is limited. (See our Education section)

SMH rose 1.67 percent to $68.95 yesterday and is up 4 percent in the last three months. Overall option volume in the fund was twice its daily average yesterday.

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