Tuesday August 18, 08:40 PM
STOCKS NEWS US-Traders turn skeptical over real estate shares
Stocks on the move
Real (Frankfurt: BJU.F - news) -time Equity news
U.S. stock market report
1517 ET 18Aug2009-Real Estate ETF draws bearish option play
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In the iShares Dow Jones U.S. Real Estate Index, bearish option
traders honed in on puts in the January 2010 contract of the real estate
exchange-traded fund. 'Such positioning indicates that the current 1.5 percent
rally in shares to $38.17 today will not last,' said Andrew Wilkinson, market
analyst at Interactive Brokers Group. Players picked up 10,000 puts at the
in-the-money January $40 strike for $6.23 apiece and spread the purchase
against the sale of 20,000 puts at the lower January $25 strike for an average
premium of 86 cents each. The net cost of the ratio put spread was $4.51 and
yields maximum potential profits of $10.49 per contract if the ETF plummets 35
percent to $25 by January expiration. Shares must fall 7 percent from the
current price before profits begin to accumulate below the breakeven price of
$35.49, he added.
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