Canada Markets closed

Sharp move seen for real-estate fund

Chris McKhann (

The iShares U.S. Real Estate Fund saw its highest close in four years on Friday, and a large trader is now looking for a big move in either direction.

optionMONSTER systems show that 67,700 each of the March 70 calls and February 67 puts changed hands. The calls were bought for $0.22 and the puts for $0.25 in volumes that were multiples of the previous open interest at each strike, indicating new positioning.

This strangle cost $0.47, which is the amount at risk if shares remain between $67 and $70. The trader is betting that the stock will be above or below that range. (See our Education section)

The IYR finished Friday at $68.09, up 0.41 percent on the day. That is below the intraday high of $68.26 set on Sept. 14 but the best close for the exchange-traded fund since June 2008. Shares were down at support at $61 in mid-November.

Total option volume in the IYR was 225,000 contracts, more than 11 times its daily average in the last month.

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