Trader Looking For More Downside In The China ETF (FXI)

“Shares of the iShares FTSE/Xinhua China 25 Index (NYSE:FXI) have fallen 10 percent in the last few weeks, and option activity today is looking for considerably more downside,” Chris McKhann Reports From Option Monster.

McKhann goes on to say, “The put buying in the (NYSE:FXI) indicates that at least one trader is betting that the FXI will be another 17 percent lower in the next month. optionMONSTER systems show that 30,000 December 35 puts have been bought against open interest of 637 contracts, with the largest block of 24,823 pushing the price up to $0.07. ”

“This out-of-the-money put buying indicates that this trader believes that the FXI is in for a big drop going forward. Traders don’t use puts that are that far out-of the money for hedging, but they can make significant profits if the underlying falls dramatically. The FXI currently trades at $43.31, up 0.25 percent on the day. It has fallen from the just shy of $48 three weeks ago, its highest price since June 2008. Shares have not been below $35 since May 2009,” McKhann Writes.

Visit Option Monster: HERE

Leave a Reply

Your email address will not be published. Required fields are marked *