Calls Purchased on Powershares Financial Preferred Portfolio (PGF)

Shares of the Powershares Financial Preferred Portfolio

are higher on the session by 0.40%, currently trading at $17.69. The ETF has been moving largely higher over the past three months, off of a recent low near $14.50 set back during the “flash crash.” Options traders are buying calls on the ETF today, betting that it can rally further. The September $17.00 call was purchased, on the offer, 1,800 times earlier in the session; open interest on the strike is 1,955 contracts. Call volume is now running at 25x the daily average. The Powershares Financial Preferred Portfolio seeks to track the price and yield performance, before fees and expenses, of the Wachovia Hybrid & Preferred Securities Financial index. The fund normally invests at least 80% of assets in preferred securities of financial institutions. It may invest at least 90% of assets in preferred securities that comprise the index. The index consists of the preferred securities of approximately 30 financial institutions. The fund is nondiversified.