Calls Spreads Trade on the SMH

Shares of the Market Vectors Semiconductor ETF (SMH) are trading lower on the session by 0.45%, at $31.07. The ETF has been moving largely lower over the past three months and is now trading below the 50-day and 200-day moving averages.

Call spreads are active on the name today, pushing overall call volume to 22x normal volume.

Shortly after the opening bell the May 2013 $27/31 call spread traded 1,244 times, mid spread, for $2.81. While it was not distinguishable whether this was a bullish or bearish spread at first, it was confirmed to be bullish given the activity that followed.

The May13 $27/31 call spread was then purchased 5,043 times for a net debit of $2.76-2.80 and then purchased 1,167 times for $2.80.

With total volume on the strikes of 8,580 contracts, this is clearly new positioning; open interest is 3 and 202 contracts, respectively.

30-day implied volatility is off 1.1% today to 23.18%; 10-day historical volatility is registering 20.61%.  

The Market Vectors Semiconductor ETF seeks to replicate as closely as possible before fees and expenses the price and yield performance of the Market Vectors US Listed Semiconductor 25 Index.

About Michael Zerinskas

Originally from Chicago, Michael J. Zerinskas began his career as an intern for a small high-frequency trading firm based at the CME; he then moved on to become Chief Options Strategist at Benzinga.com. Michael is now Unusual Activity Editor at The Options Insider, specializing in VIX, volatility, and flagging unusual activity.