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Real-estate fund draws bearish play

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

A large trader is extending a downside position in the iShares Dow Jones U.S. Real Estate Index Fund.

OptionMonster's market scanner shows that 9,751 November 70 puts were sold for $0.10 while 9,751 Weekly 69 puts expiring on Nov. 25 were purchased for $0.16 yesterday. Volume was below open interest in the nearer-term contracts, which expire at the end of this week, indicating that a downside position was rolled forward by a week to a lower strike.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)

IYR rose 1.73 percent to $74.53 yesterday but is down 12 percent in the last three months.

Overall option volume in the fund was 3 times greater than average yesterday. Puts outnumbered calls by a bearish 3-to-1 ratio.

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