Bulls drive bears out of Russian ETF


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Russia may be known for bears, but the bulls are taking over.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,750 September
32 calls in the Market Vectors Russia exchange-traded fund for $0.20. An equal number of September 31 calls were sold at the same time for $0.60, but volume was below open interest.

This suggests that the investor closed a winning position in the September 31s and rolled it to the higher strike. He or she collected a credit of $0.40 in the process and stands to earn further profits if RSX continues to advance. A similar bullish trade occurred in Russian Internet stock Yandex .

RSX has been rallying as investors focus on the country's heavy concentration in resources and energy. Last week's move by the Federal Reserve to purchase mortgage securities added fuel to the fire by driving money into commodities.

The central bank in Moscow also stunned investors on Friday with a surprise interest-rate hike. Given that most other countries are easing, that could draw capital into ruble assets as well.

RSX rose 1.82 percent to $30.98 in the session and is up 23 percent over the last three months. Friday's call rolled pushed total option volume to almost 7 times normal levels.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing , Options

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