China ETF Sees Some Bullish Options Trade

The iShares FTSE/Xinhua China 25 Index (NYSE: FXI), the most heavily traded China-focused ETF, is seeing some bullish options action today as one trader sold 5,000 May 37 puts and used the proceeds to fund the purchase of the same amount of May 38 puts. The trader may have the shares put to him if FXI drops below $37 and has the potential for added profits if the ETF moves above $38.

FXI holds 25 of the most liquid Chinese stocks, including many names that are listed on U.S. exchanges. The ETF holds nearly half of its assets in financial services names while energy stocks account for another 20% of FXI.