Shares of the iShares FTSE China 25 Index Fund (FXI) are trading higher on the session by 0.69%, at $37.45. The ETF has been rallying over the past two months and is now nearing its $38.00 historical resistance level.
With shares of FXI forming a bull flag pattern, traders are leveraging exposure to the upside. A short while ago the December $39.5/35.00 risk reversal traded 4,000 times for even; the calls were purchased, while the puts were sold. Note: this trade was originally a block of 6.5k contracts, but that has since been canceled and replaced with blocks of 4k.
Volume has not exceeded open interest on either strike.
In other FXI risk reversal news, the February 2013 $37/34 bull risk reversal was purchased 1,500×3,000 times for a net debit of $0.49. Volume did not exceed open interest on these strikes either.
30-day implied volatility is off 3.3% today to 21.46%; 10-day historical volatility is registering 18.71%.
The iShares FTSE China 25 Index Fund seeks investment results that correspond generally to the price and yield performance before fees and expenses of the FTSE China 25 Index.