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Spread looks for Russia rebound

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

Traders are looking for the Market Vectors Russia Fund to rebound in coming months.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 7,000 February 18 calls for $0.46 and the sale of 7,000 February 20 calls for $0.13 on Friday. Volume was far above the open interest in both strikes, showing that this is new positioning.

This vertical spread cost a net $0.33 to open and is looking for RSX to rally above $18 by expiration in mid-February. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $20. (See our Coaching section)

RSX fell 4.45 percent to $16.74 on Friday. The exchange-traded fund has fallen nearly 5 percent since Turkey shot down a Russian warplane last Monday is still up 8 percent in the last three months.

Total calls in the fund outnumbered puts by a bullish 3-to-1 ratio on Friday.

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