iShares MSCI Turkey ETF (TUR) Sees a Rush of Post-Coup Put Buying

iShares MSCI Turkey ETF (TUR) put volume has surged to 128 times the average intraday pace

Karee Venema
Jul 18, 2016 at 12:51 PM
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iShares MSCI Turkey ETF (TUR) -- the exchange-traded fund (ETF) that tracks Turkish stocks -- has plunged 6.1% to trade at $39.06, following a failed coup by the country's military over the weekend. Meanwhile, both stock and options volume are on fire, with puts crossing the tape at 128 times what's typically seen at this point in the day.

By the numbers, 1.7 million TUR shares have traded, an annual high. In the options pits, meanwhile, 31,313 TUR puts have crossed the tape so far -- a 52-week peak -- compared to fewer than 550 calls.

Nearly all of the day's action has centered at TUR's August 30 put. According to Trade-Alert, there's been a mix of sell-to-close and buy-to-open action occurring. For those speculators purchasing new positions, the expectation is for the ETF to breach the round $30 mark by front-month expiration at the close on Friday, Aug. 19.

More broadly speaking, options traders have shown a distinct preference for long puts over calls in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TUR's 50-day put/call volume ratio of 13.02 ranks in the 68th annual percentile. In other words, puts have been bought to open over calls at an accelerated clip.

Echoing this is TUR's Schaeffer's put/call open interest ratio (SOIR) of 20.69. Not only does this show that puts outweigh calls by a nearly 21-to-1 ratio among options expiring in three months or less, but it rests 4 percentage points from a 52-week peak, meaning short-term speculators have rarely been as put-skewed as they are now. What's more, the bulk of this activity has occurred at the previously mentioned August 30 strike, where 22,700 contracts were already in residence ahead of today's trading.

Technically, the iShares MSCI Turkey ETF (TUR) has spent the majority of 2016 chopping between its late-January six-year low of $33.15 and its late-April annual high of $46.42. Based on its present perch, the shares are up 7.4% on the year.

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