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UltraShort Shares, Options Heating Up

Thursday, 22 Jan 2009 | 5:18 PM ET

This blog post was written by OptionMonster's Chris McKhann.

As the market sees broad declines, one of the UltraShort exchange-traded funds is trading higher.

The ProShares UltraShort 20+ Year Treasury has been rising steadily since hitting a bottom of $36 in December, up some 3 percent this afternoon to about $44. This ETF looks to provide twice the inverse of the daily performance of the iShares Barclays Capital 20+ Year U.S. Treasury Index .

  • More Options Tips from Jon Najarian

The options volume is unusual, as 29,000 contracts changing hands against a 20-day average of fewer than 9,000, according to OptionMonster's tracking systems.

Much of the activity involved a vertical spread with the purchase of 2,500 February 40 puts and the sale of the same number of Febuary 36 puts. Traders are also buying the February 45 calls, with more than 6,000 contracts trading.

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More Major UltraShort ETFs:

UltraShort Oil & Gas ProShares

UltraShort MSCI Emerging Mrkts ProShares

UltraShort Dow30 ProShares

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Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.com.

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Disclaimer

  Price   Change %Change
DUG
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DXD
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EEV
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TBT
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ISH BAR 20YTB
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