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Global fund draws leveraged strategy

Global Stocks are attempting to bounce, and one investor is using the iShares MSCI EAFE Index fund to get long.

optionMONSTER's Heat Seeker tracking program detected the purchase of 10,000 September 53 calls for $1.28 and the sale of 10,000 September 46 puts for $0.80. An equal number of September 50 puts were sold at the same time for $1.60, but volume was below open interest in that strike.

It isn't clear whether all three positions were opened, but the activity is bullish regardless because selling puts and buying calls is similar to owning stock. If EFA climbs, the calls will appreciate and the puts will expire worthless. The opposite thing will happen to the downside.

The fund, which owns global companies such as Nestle, HSBC Holdings and BHP Billiton, rose 2.07 percent to $51.21 in morning trading, but has lost 15 percent of its value in the last month. It's now attempting to find support at a slightly higher low than where it bounced last August.

The bullish options trade accounts for almost all of the activity in EFA so far today, according to Heat Seeker.

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.


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

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