Indian stocks have been explosive, but now traders are worried about a pullback.
optionMONSTER's Depth Charge monitoring program detected the purchase of about 10,000 September 22 puts on the WisdomTree India Earnings Fund for $0.27. Volume dwarfed previous open interest of 68 contracts, which indicates that new positions were initiated.
Puts lock in the price where investors can sell EPI, which holds stakes in companies including oil driller Reliance Industries, IT-outsourcing firm Infosys and lender Icici Bank. That way they can protect winning positions in the fund or speculate on a drop. Either way, the contracts' cheap cost can result in significant leverage from a small move. (See our Education section)
EPI is down 0.39 percent to $22.75 but is up 31 percent so far this year. That makes it the best-performing of more than 20 country indexes tracked by our researchLAB market scanner. It also is nearly quadruple the performance of the S&P 500 over the same time frame.
Total option volume is already 9 times greater than average in the fund. Puts outnumber calls by more than 91 to 1.
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