EWW Options Volume Pops Ahead Of NAFTA Negotiations
Schaeffer's Investment Research | May 06, 2018 01:01AM ET
With the U.S., Mexico, and Canada slated to resume Trade-Alert indicates was bought to open for $0.63 apiece -- creating an initial cash outlay of $315,000 (number of contracts * premium paid * 100 shares per contract). This is the most the trader stands to lose, should EWW settle below the strike at the close on Friday, June 15, while breakeven for the call buyer at expiration is $51.63 (strike plus premium paid).
Options traders were already active on the exchange-traded fund (ETF) heading into today's trading, with total open interest of 392,026 contracts at a 12-month peak. Most of the action has been centered in the July series, with the 46 put and 54 and 58 calls home to the fund's top open interest positions of roughly 22,000 contracts each.
According to data from the major options exchanges, it looks the bulk of these positions were initiated back on March 14, with the calls being bought to open and the puts being sold to open. If these are connected, the speculative play sets a short-term floor for EWW at $46, while betting on a breakout above long-term resistance by mid-June.
Looking at the charts, EWW hasn't traded below $46 since February 2017, with the $48-$49 region serving as a base going back to November. However, any rally attempts in 2018 have been halted in the $54-$55 neighborhood -- home to the fund's early October bear gap, and a 61.8% Fibonacci retracement of its plunge from August highs near $58 to mid-November lows at $48. At last check, EWW was trading down 1% at $48.88, pacing for a fifth straight loss.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.