The PHLX executed a large ratio spread this morning that will quadruple the open interest in the First Trust ISE Revere Natural Gas ETF options. Crossed between two broker-dealers, one participant bought 23,000 June 19 calls for $1.35, against a sale of 11,500 June 12 calls for $6.40, resulting in a net credit of $3.70 and a payoff profile that performs best if FCG stays near recent $18-19 range (new 52wk high of 19.22 was set this wk). Top holdings in the product include Pioneer, Stone, and Cimarex Energy, and the trade features significant upside risk if FCG were to rise thru the $25 range.
Category: All ETFs
About the Author (Author Profile)
Henry Schwartz is the president of Trade Alert LLC, a provider of real-time options analysis tools to leading Wall Street firms. His systems analyze hundreds of thousands of transactions per second to help professionals identify and interpret market activity in real time, supporting informed trading decisions and intelligent idea generation. He has held institutional trading and management roles with Bank of America, Bear Stearns, Salomon Brothers and the Hull Group, and made markets on the CBOE and AMEX floors in the US, and EUREX and MONEP overseas. Prior to founding Trade Alert, he led the electronic market-making group at Bank of America coincident with the launch of the International Securities Exchange. He received his bachelor’s degree in Economics from the University of California, San Diego and his MBA from NYU’s Stern School of Business.