FXI Call Stupids

A “Call Stupid” is a multi-leg transaction, or spread in which the trader purchases two separate strikes. A normal spread would see a trader buy one strike and sell the other, but in a call stupid the trader buys both. Many of us believe the transaction got its name from the idea that it is stupid to buy two strikes rather than just committing that same capital to one strike.

In any case and however the transaction got its moniker, someone BIG bought a call stupid in the iShares FTSE/Xinhua China ETF today. That ETF trades under the symbol FXI.

The trade was the purchase of 25,000 of the FXI October 40 calls for $.63 along with the purchase of 39,823 of the Oct 40.50 calls for $.47 & $.48.

fxioct40

fxioct40-50

These multi-million dollar investments are bets that China makes a serious run over the next 44 days.