“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.
|HUMAN GENOME SCIENCES INC||(HGSI)||0.55%|
|TUPPERWARE BRANDS CORP||(TUP)||0.30%|
|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%|
|PUT OPTIONS||Expire at close Fri, Apr 16, 2010|