$FXI bulls score another win

Bullish option traders have scored another win in upside positions on the iShares China Large-Cap Fund (FXI) today.

On Oct. 28, Market Rebellion’s tracking systems detected the purchase of 10,000 Weekly $42.50 calls expiring tomorrow, November 8, for $0.26 to $0.28 with shares at $41.92. These were clearly new positions as open interest in the strike was only 42 contracts before the activity appeared.

Those calls have traded for as much as $0.70 so far today, more than 2 times their purchase prices. The stock rose 2.98% in the same time frame, illustrating the kind of leverage that can be achieved with options.

It is the second winning trade in the ETF to be posted on Market Rebellion this week.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

FXI is currently higher by 1.12% at $43.17 on the day. The exchange-traded fund, which tracks a basket of Chinese equities, has risen after a Reuters report that China and the United States have agreed to cancel tariffs in phases.