Calls being bought on the FXI (ishares Long China)

This week, trading of ishares FTSE/Xinhua China 25 (NYSE:FXI) Calls have been picking up steam.  Place your bets, China could be set for a comeback and its going to be more than 1 Night in China.

Here's the lastest from Schaeffersresearch.com:

Once seen as the high-flying growth exchange-traded fund (ETF), the iShares FTSE/Xinhua China 25 (FXI) has seen its value plummet 56% on a year-to-date basis. In Monday and Tuesday's trading, we are picking up signals from the options market that speculators are anticipating a rally in the near term.

In Monday's trading, we saw unusual Buy-To-Open option activity, with data used from the International Securities Exchange (ISE). In fact, there were 27,477 call contracts that were bought to open relative to only 140 put contracts. This was the largest spike in call activity since volume of 31,700 contracts on September 17.

Furthermore, Tuesday's action is seeing more call speculation. As of 1:20 pm Easter time, ISE data show that there have been 24,665 call contracts bought to open, while only 57 put contracts have been purchased. Grabbing much of the attention on FXI's options has been the January 35 call.

Looking at the graphic below of FXI 10-day ISE Call/Put Ratio, we believe that this ratio will continue to soar higher and likely compete with previous Call/Put Ratio peaks from the past 2 months.