EPI Puts See Rare Surge as India-Pakistan Tensions Rise

The April 23 put was in high demand on Wednesday

by Karee Venema

Published on Feb 28, 2019 at 2:01 PM

WisdomTree India Earnings Fund (EPI) -- which offers exposure to "profitable companies in the Indian equity market" -- saw a spike in options trading yesterday, amid news of escalating tensions between India and Pakistan. In fact, options volume topped out at an annual high of 38,472 contracts traded in one session, with the bulk of the action occurring on the put side.

More specifically, 32,443 puts changed hands on Wednesday -- nearly 23 times what's typically seen in a single day, and a 12-month high. Nearly 60% of the day's put action went off at the April 23 strike, and it looks like new positions were purchased, meaning speculators are betting on a move back below $23 by back-month options expiration at the close on Thursday, April 18.

This burst of bearish activity is relatively rare in EPI's options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), options traders have bought to open 10,199 calls in the past 10 days, compared to just 70 puts -- the bulk of which occurred at the June 25 call.

Looking at the charts, EPI hit a familiar ceiling at $27.20 on Aug. 27, before falling to a 20-month low of $21.65 on Oct. 26. The fund rebounded back up to $25 by late December, but pulled back to $23, home to a 23.6% Fibonacci retracement of that aforementioned sell-off. A bounce from here has the fund testing resistance at its 80-day moving average, with the shares last seen up 1.4% at $24.03 on news Pakistan will release the Indian Air Force pilot it imprisoned earlier this week.

epi daily chart feb 28


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!


  
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


With This Lithium Stock, It Will Be Better to Be Too Early Than Too Late
Click to continue to advertiser's site.
Tesla Drops Prices to Boost Demand
Tesla is cutting North American and Chinese prices by as much as 6%
DPZ Sizzles After Same-Quarter Sales Bounce
Comparable-store sales in the U.S. rose by 14% during the first two months of the current quarter
With This Lithium Stock, It Will Be Better to Be Too Early Than Too Late
Click to continue to advertiser's site.