New 52-Week Low for ProShares UltraShort China But Call Volume Huge (FXP)

ProShares UltraSh FTSE/Xinhua China 25 (NYSE:FXP) hit $7 a share today and since Feb 8th the fund is down 30%.  Despite the downward momentum traders have been going long with options, including 23,454 contracts for the May $7 Call.

(Benzinga.com | Michael J. Zerinskas) I am seeing some huge options volume in the ProShares UltraShort FTSE/Xinhua China 25 ETF (NYSE: FXP) this morning that may suggest the country’s market is at a top. The May $7 calls have been purchased all morning long in medium sized blocks for $0.65-0.70. The vast majority of trades have been purchases on the offer.

The ProShares UltraShort FTSE/Xinhua China 25 ETF is currently trading at a support level after falling precipitously over the last three months. It appears that some traders believe that this level will hold and that the Xinhua 25 will begin selling off here. Implied vol is carrying an 11 point premium to historical vol in the ETF; the $7 call is carrying an even larger premium, suggesting that whomever purchased the options is willing to pay up significantly for the potential of a large move.

The ProShares UltraShort FTSE/Xinhua China 25 ETF is a double inverse ETF that rises in value 2% when the index it tracks falls 1%.

source: http://www.benzinga.com/trading-ideas/long-ideas/208865/china-to-sell-of...