Friday, November 15, 2013

Sold Dec$37.5p on FXI

FXI gapped up and broke up the 2 month down trending channel today with high volume. Since I'm bullish on China over long term, I looked for a way to play this ETF. My rules require me to see a 6 week retrace from overbought zone for the MS line in order to enter an uptrend trade. But FXI MS is dropping for about 4 weeks only. Thus I used the naked put strategy as it requires FXI to move sideways or up. FXI also has a high cor-relationship with SPX. So I felt it's saver with the naked put as US market has been running up without a rest for quite some time. I plan to keep FXI if the put has to be exercised later. My cost will be 37.5-0.68 = $36.82. TOS indicated a 18% annual return rate.

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