The iShares Biotechology Fund (IBB) is seeing bearish order flow Tuesday. Shares of the fund are down 87 cents to $70.73 and volume in the options market is running double the usual. The top two trades include 1,500 November 70 puts traded offerside for $3.20 a contract and 1,500 November 65 puts traded bidside for $1.64. The trade was repeated at least four more times until volume in both contracts rose to more than 7,500. The action hints at bear put spreads, where the strategists are buying the 70s and selling the 65s for roughly $1.56 per spread. If so, the potential payoff is $13.44 if IBB falls to $65 per share or less by November options expiration.
Category: All ETFs
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.