Bulls Following Money into Brazilian Fund

Good news drove Brazilian stocks higher for the second session in a row and drove bullish option activity yesterday (Thursday).

This time the paper shifted forward a couple of months as buyers snapped up the June 82, 79, and 75 calls in the iShares MSCI Brazil Index. The largest block in the June 82s priced for $1.44 as some traders appeared to be selling the higher strikes to help pay for the lower ones.

Almost 39,000 calls changed hands in total versus about 17,000 puts, so there was definitely a bullish tone to trading in the exchange-traded fund.

The fund ended the session up 1.03 percent to $77.51. The catalyst earlier in the week was the Brazilian central bank's estimates for 2011 inflation, which suggested that borrowing costs will not increase in the immediate future and that interest rates could remain manageable.

That was good news for banks and industrials. The country's steelmakers are also benefiting from increased demand domestically and internationally.


Najarian has no positions in the EWZ.

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.