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Real-estate ETF gets show of support

Chris McKhann (chris.mckhann@optionmonster.com)

The iShares Dow Jones U.S. Real Estate Fund jumped on Friday, and one huge trade is looking for current levels to hold.

optionMONSTER systems show that 30,000 May 70 puts were sold for the bid price of $0.52. This is clearly a new position, as its volume was well above the strike's open interest of 12,134 contracts before the session began.

The put selling is a bet that the IYR will hold up above $70 through the expiration of those puts in a month. The trader will face the obligation to buy shares if they fall below that strike price. (See our Education section)

The IYR gained 1.15 percent to $71.86 on Friday after reaching $72.60 in the previous week, its highest intraday price since December 2007. Shares have been trending higher from support at $59 since last June and were last below $70 at the start of this month.

More than 163,000 IYR options changed hands, compared to the daily average of 34,000. There was a lot of action late in the day in the April 72 calls and puts, but it was all below open interest and could therefore be either opening or closing transactions.

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