Dan Nathan Sees Unusual Options Activity In iShares FTSE/Xinhua China 25 Index

On CNBC's Options Action, Dan Nathan spoke about unusually high bullish options activity in iShares FTSE/Xinhua China 25 Index (ETF) (NYSE: FXI).

When the stock was trading at $35.60, there was a buyer of 100,000 contracts of the January 37 calls for $0.38. The breakeven for the trade is at $37.38 or 4.5 percent higher from the closing price on Monday.

Nathan compared the performance of Shangai Composite Index with the performance of iShares FTSE/Xinhua China 25 Index (ETF) and he concluded that the Shangai Composite Index has stabilized after a sharp decline during the summer, while the ETF is currently trading close to its lows. He added that implied volatility looks pretty reasonable, trading at 50 percent off its August levels.