Reuters is reporting that, “Massive bearish butterfly spreads initiated in the iShares MSCI Emerging Markets Index (EEM) cast a gloomy shadow for the exchange-traded fund within the next few weeks, said Interactive Brokers Group equity options analyst Caitlin Duffy. EEM shares fell 41 cents to $36.95. She noted one big player is bracing for a near 19 percent pullback in the ETF by June expiration and paid 45 cents for the June $25-$30-$35 put fly. The fly’s wing size was 60,000 contracts each and the body had volume of 120,000 contracts. The EEM’s shares must slip beneath the upper break-even price of $34.55 before the investor starts to make money. The bearish player stands to reap a potential maximum profit of $4.55 per contract if shares plummet down to $30 by June expiration, just under the ETF’s 52-week low of $30.12, she said. Separately, the June $29-$32-$35 put fly was bought at 29 cents and traded 10,000 times on CBOE, said WhatsTrading.com option strategist Freder9ic Ruffy. Duffy noted the smaller trade’s break-even point is $34.71 and yields a maximum potential profit of $2.71 apiece if shares fall to $32 at June expiration.” For the full story click: HERE

The iShares MSCI Emerging Markets Index Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in emerging markets, as represented by the MSCI Emerging Markets Index. EEM is trading down 4.1% at the time of print.

NYSE:EEM