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By Pete Najarian

The iShares MSCI Emerging Markets Index ETF is always a popular name in the option market, and yesterday traders were taking downside positions.

EEMThe bearish activity began early in the EEM's May 40 puts. Then as the session progressed, our Depth Charge system detected buying of the February 45s, March 42s, and the March 46s. By the end of the day, almost 312,000 puts had traded against fewer than 54,000 calls.

The exchange-traded fund fell 1.06 percent to $45.81 yesterday, following a 3 percent drop on Friday. The fund provides diversified coverage across financials, industrial materials, energy, telecom, and most other sectors in emerging-market economies.

The puts may have been bought as protection on a stock position or as a speculative play looking for a downside move. Either way the trade is not a surprise after developing countries took a hit last week with the unrest in Egypt.

Overall option volume in the EEM was more than twice the average amount yesterday.

Source: Bears Flock to Emerging-Market ETF