iShares MSCI Turkey ETF (TUR) is an ETF that seeks to track the return of the MSCI Turkey Investable Market Index. This index measures the performance of equity markets in Turkey. Shares of TUR are currently trading at $52.35 in a 52 week range of $47.36-$77.38. The fund has been underperforming the U.S. equity market this year with shares falling nearly 22% year to date. Despite this weakness options traders made some very bullish bets on TUR in yesterday’s trading session. Early in the session a traders sold 2,575 TUR Dec 49 puts for $0.80. This is a very bullish bet that involves a large amount of risk meaning this trader’s conviction is relatively high. With this position a trader is indicating a strong belief that price will be above $49.00 on December expiration. We believe that this order is a great signal for an opportunity for a covered call in TUR.
Trade: Buying 100 shares of TUR at $52.35 for every Dec 49 Call sold for $4.25
Reward: $90 per 1 lot
Breakeven: $48.10
Should shares of TUR close above $49.00 on December expiration this trade will net its maximum potential profit of $90 per 1 lot. This trade will also net some profit anywhere above $48.10. If shares close above $49.00 on expiration this trade will net an annualized return of 19.8%
