$EWH bears collect profits

Bearish option traders are collecting profits in downside positions on the iShares Hong Kong ETF (EWH) today.

On May 14, Our market scanners identified the purchase of 5,000 September $23 puts in one print for $0.45 with shares at $25.30. Volume was well above the strike’s open interest of 319 contracts, showing that this was a new position.

Those puts have traded for as $1.35 so far today, more than 3 times times their purchase price. The stock fell 12.4% in the same time frame, a huge move but still nowhere near that of its options on a relative basis.

Long puts lock in the price where a stock can be sold no matter how far it might drop, gaining value in a selloff with the potential for significant leverage. The contracts can be purchased either as an outright bearish bet or a hedge on a long-stock position.

EWH is currently trading lower on the session by 2.47% at $22.11. The ETF, which tracks a basket of Hong Kongese equities, has dropped among global volatility, as well as domestically active protests, demanding democratic reform.