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Volatility trader targeting Korea ETF

Chris McKhann (chris.mckhann@optionmonster.com)

A large trade is looking for volatility to rise in the iShares MSCI South Korea Fund, which is not far off its highs of last week.

optionMONSTER systems show that a trader bought 5,000 February 62 puts $0.87. The volume was well above the strike's open interest of 2,912 contracts at the start of the session, so this is a new position.

Less than a minute later, a single print of 175,000 EWY shares traded for $63.25. The delta of the puts was -0.35, so the combination of stock and options would create a market-neutral position designed to profit from rising volatility more than any directional move in the shares. (See our Education section)

The EWY is up 0.71 percent to trade at $63.11. The exchange-traded fund was down at support at $56 in mid-November but hit a 52-week high of $65 on the first day of the year.

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