There's Another Oil Services ETF (IEZ) And It's Seeing Bearish Options Trade...

I know I mentioned the Oil Services HOLDRs ETF (AMEX: OIH) yesterday as a great way to use ETFs to play a rise in oil prices, but I saw some bearish options action today in an ETF that is very similar to OIH. The Dow Jones US Oil Equipment Index (NYSE: IEZ) has seen more than 4,000 December 45 puts change hands.

I know I mentioned the Oil Services HOLDRs ETF (AMEX: OIH) yesterday as a great way to use ETFs to play a rise in oil prices, but I saw some bearish options action today in an ETF that is very similar to OIH. The Dow Jones US Oil Equipment Index (NYSE: IEZ) has seen more than 4,000 December 45 puts change hands.

That's remarkable when considering there was no existing open interest in that strike and IEZ usually trades just 111 options contracts per day. IEZ is much more thinly traded than OIH, though it holds many of the same stocks such as Diamond Offshore (NYSE: DO) and National Oilwell Varco (NYSE: NOV).

Oil is down today and both ETFs are taking it on the chin. The professor says this is a simple equation: Oil goes up, these ETFs will follow suit. Oil goes down, IEZ and OIH will do the same.