China to Roll Over?

Shares of the PROSHARES ULTRASHORT FTSE/XINHUA CHINA 25 (NYSE: FXP) are on the rise today by over 8.25% to $43.44, as mainland shares sell off. The ETF, which tracks the double inverse of the Xinua 25 Index, is also seeing call buying today. The June $50 calls were purchased on the offer 9,700 times in a single block a short while ago. The September $60 calls were also purchased 10,000 times for $3.05.

It appears that large, institutional players are purchasing protection on their Chinese holdings by getting highly levered to downside in the index via the PROSHARES ULTRASHORT FTSE/XINHUA CHINA 25 ETF.