Option traders are positioning for continued rebound in Russian stocks as global asset prices rise buoyed by a rebound in crude oil prices. Shares in Market Vectors Russia ETF participated midweek in a U.S.-led rally for stocks, inspired by soothing words on monetary policy from the Federal Reserve, and have extended gains on Thursday. Shortly after the market opened its shares added 2.08% to stand at $16.18.
Meanwhile options on the ETF had attracted volume of 34,000 contracts and among the most-actively traded during the first half hour of trading. Option traders targeted the January 2016 expiration in early trading at the 19.0 strike, although time and sales data indicates some 11,200 call options were predominantly sold at an average premium of $1.90 each.
Investors are possibly aiming to take advantage of lower volatility in coming months, while the implied reading of 69.7% is lower on the day by around 5.5%. The short-sale strategy could also combine a long stock component as part of a covered call strategy. Ahead of Thursday’s activity open interest stood at a mere 617 contracts.
Chart show Russian stocks rebound