The iShares MSCI Brazil Fund (EWZ) puts were active Wednesday, as one player appears to have opened a substantial diagonal spread on this exchange-traded fund. 26,000 EWZ puts and 16,000 calls traded on the day. The March 70 and January 45 puts were the day’s most actives. In late day trading, an order for 6,000 of the March 70 puts traded offerside for $6.60 a contract. Meanwhile, the same number of January 45 puts traded bidside for 40 cents a contract. EWZ was near $73.30 at the time. Open interest in both contracts increased by more than 6,000 since yesterday. Consequently, the trade appears to be the opening of a diagonal spread, where the strategist is buying the March 70 puts as a possible play on weakness in Brazil’s equity markets. Some of the cost for the puts is offset by the sale of the January 45s and the strategist might therefore expect the ETF to fall in price, but not below the $45.00 strike price of the short put by January 2009 options expiration.