A synthetic put trade initiated on the iShares Emerging Markets ETF on Monday morning suggests one large options market participant is positioning to benefit from a pullback in the price of the underlying shares by regular May expiration. Shares in the EEM are today trading up 1.0% at $41.17 as of 11:15 a.m. ET.
The purchase of approximately 80,600 of the May $41.5 strike calls at a premium of $1.05 per contract was tied to the sale of EEM stock at $41.22. Shares in the ETF have rallied 11% in the past two months since touching down at a six-month low of $37.05 at the beginning of February. The synthetic put established with EEM stock and options today benefits if the ETF reverses those gains during the next two months.
