Traders Seek Bearish Options In The iShares Russell 2000 ETF (IWM)

“As Wall Street awaits the release of several economic reports, options traders sought bearish positions in exchange-traded funds that track specific segments of the market. Among the most active names of the session was the iShares Russell 2000 Index Fund (IWM), an exchange-traded fund (ETF) that tracks small-cap stocks, including Human Genome Sciences Inc. (HGSI), UAL Corp.(UAUA), Tupperware Brands Corp. (TUP) and 3Com Corp (MMM),” Tennille Tracy Reports From The WSJ.

Trading in the iShares fund took on a cautious tone as investors adopted massive “put spreads” in the fund’s April contracts, buying April $68 puts and then selling April $65 puts to help offset the cost, according to Trade Alert.

“Since ETFs are often used as a hedge, the traders in this case could be looking to protect their stock portfolios against declines or speculating on such moves taking place. Currently priced at 80 cents, the put spread makes money if the iShares fund slips below $67.20, a level under which it hasn’t closed since March 9. The fund finished the day at $68.39, up 0.3%,” Tracy Reports.

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Here are some details on the iShares Russell 2000 Index ETF including a snapshot of the options activity mentioned.

The iShares Russell 2000 Index Fund (IWM) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the small capitalization sector of the U.S. equity market as represented by the Russell 2000 Index. The index represents the approximately 2,000 smallest companies in the Russell 3000 Index.

Company Name Symbol Percentage
HUMAN GENOME SCIENCES INC  (HGSI) 0.55%
UAL CORP  (UAUA) 0.32%
TUPPERWARE BRANDS CORP  (TUP) 0.30%
3COM CORP  (MMM) 0.29%
DOMTAR CORP  (UFS) 0.26%
SKYWORKS SOLUTIONS INC  (SWKS) 0.26%
SOLERA HOLDINGS INC  (SLH) 0.26%
ASSURED GUARANTY LTD  (AGO) 0.26%
E*TRADE FINANCIAL CORP  (ETFC) 0.25%
POLYCOM INC  (PLCM) 0.25%

Chart for iShares Russell 2000 Index (IWM)

PUT OPTIONS Expire at close Fri, Apr 16, 2010
 
Strike Symbol Last Chg Bid Ask Vol Open Int
46.00 IWM100417P00046000 0.03 0.00 N/A 0.01 0 66
47.00 IWM100417P00047000 0.03 0.00 N/A 0.01 0 615
48.00 IWM100417P00048000 0.01 0.00 N/A 0.01 0 430
49.00 IWM100417P00049000 0.02 0.00 N/A 0.01 0 757
50.00 IWM100417P00050000 0.05 0.00 N/A 0.01 0 633
51.00 IWM100417P00051000 0.02 0.00 N/A 0.01 0 377
52.00 IWM100417P00052000 0.03 0.00 N/A 0.02 0 10,889
53.00 IWM100417P00053000 0.03 0.00 0.01 0.02 0 3,268
54.00 IWM100417P00054000 0.03 0.00 0.01 0.02 614 9,294
55.00 IWM100417P00055000 0.02 Down 0.01 0.02 0.03 1 42,448
56.00 IWM100417P00056000 0.02 0.00 0.02 0.03 1 24,544
57.00 DIW100417P00057000 0.03 0.00 0.03 0.04 20 13,645
58.00 DIW100417P00058000 0.05 Up 0.01 0.04 0.05 4 18,600
59.00 DIW100417P00059000 0.04 0.00 0.05 0.06 2 11,748
60.00 DIW100417P00060000 0.07 0.00 0.07 0.08 127 109,765
61.00 DIW100417P00061000 0.07 Down 0.01 0.09 0.10 16 29,605
62.00 DIW100417P00062000 0.11 Down 0.02 0.12 0.13 290 49,910
63.00 DIW100417P00063000 0.15 Up 0.01 0.17 0.18 2,325 60,627
64.00 DIW100417P00064000 0.25 Up 0.05 0.24 0.25 14,338 168,525
65.00 DIW100417P00065000 0.36 Up 0.09 0.35 0.36 4,759 184,402
66.00 DIW100417P00066000 0.55 Up 0.13 0.53 0.55 9,133 145,061
67.00 DIW100417P00067000 0.82 Up 0.14 0.81 0.82 14,288 177,638
68.00 DIW100417P00068000 1.20 Up 0.21 1.20 1.21 48,012 161,574
69.00 DIW100417P00069000 1.74 Up 0.30 1.75 1.77 11,276 42,034
70.00 DIW100417P00070000 2.46 Up 0.41 2.42 2.44 7,716 27,034
71.00 DIW100417P00071000 3.08 Up 0.17 3.27 3.32 639 4,838
72.00 IOW100417P00072000 4.16 Up 0.65 4.17 4.22 82 6,419
73.00 IOW100417P00073000 4.71 Down 0.33 5.13 5.20 126 2,734
74.00 IOW100417P00074000 5.70 Up 0.01 6.12 6.19 4 2,770
75.00 IOW100417P00075000 6.49 Up 0.15 7.13 7.19 237 3,677
76.00 IOW100417P00076000 7.70 0.00 8.05 8.24 27 3,318
77.00 IOW100417P00077000 8.46 0.00 9.01 9.19 200 2,570
78.00 IOW100417P00078000 10.00 0.00 10.03 10.23 1 1,130

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