Unusual Options Activity In Global X FTSE Greece 20 ETF $GREK

| May 4, 2015 | 0 Comments

Unusual Trading VolumeUnusual Options Activity In Global X FTSE Greece 20 ETF $GREK

As many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.

This is something professional options traders pay a lot of attention to, and for good reason…  Unusual options activity can “tip off” big moves in a stock, either up or down.

So let’s take a look at some ‘interesting’ activity that caught our eye this week…

Global X FTSE Greece 20 ETF $GREK is one of the most popular methods of trading the Greek stock market.  The ETF averages nearly 1 million contracts per day traded.  Check here for more info on the fund.

$GREK is down 8% for the year.  The current share price of $12.45 is 49% from the 52-week high and 28% above the 52-week low.

So what does unusual options activity in $GREK tell us?

Greece has obviously been in the news a lot.  The country has been dealing with massive debt issues from the beginning of the Euro crisis.  The government has had to rely on the ECB and other EU countries to keep it from becoming insolvent.

On one hand, Greece created its own problems by running up ridiculous amounts of debt compared to its GDP.  On the other hand, the country hasn’t been done any favors by the rest of Europe, where some countries have had unrealistic demands on the government’s spending.

Here’s the deal…

A trader purchased 5,000 September 14 calls for 1.25 per contract.  Remember, a call option is when the underlying instrument is expected to go higher.

The total cost of the trade is $625,000, which is the max loss on the trade.  The trade breaks even at $15.25, as long as it happens by September expiration.

There are two reasons why this trade is interesting.  First off, the average daily options volume on $GREK is only around 3,000 contracts.  Compared to the usual activity, this is definitely a big trade.

Moreover, a large bullish trade like this could bode well for Greece’s future.  It may mean the smart money believes Greece is going to remain part of the Euro.  That could certainly help avoid some market volatility in the future.

Here’s the chart of $GREK:

unusual option activity, a chart of $GREK

As you can see from the chart, $GREK recently saw a positive turnaround.  The ETF broke through the 50-day moving average, and could be set to start trending higher.

The call buyer apparently believes GREK has bottomed out and the ETF is going to climb.  He or she believes the climb will gain steam over the summer, as the options don’t expire until mid-September.

More Options Trading Ideas…

Keep in mind, there’s a lot more unusual options activity going on than what we discuss here.

We just try to bring you what we feel are the most significant ones– and the ones you might actually be able to make some money on!

Yours in Profit,

Gordon Lewis

Note: Gordon Lewis has been trading options for more than 15 years and he now writes and edits for Optionstradingresearch.com.  You can sign up for the newsletter and get a free research report. We are your go-to source for top notch options trading research.


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Category: Unusual Options Trading Activity

About the Author ()

Gordon Lewis is the Chief Investment Strategist and editor for the popular daily newsletter – Options Trading Research. He’s also editor of our dynamic theme-based options trading service, Advanced Options Adviser, and one of the key analysts behind the highly successful Options Trading Wire.