IYR – iShares Dow Jones U.S. Real Estate Index – Shares of the real estate exchange-traded fund decreased 1% during the session to $40.53. Investors made bearish plays on the fund using two different option strategies. One transaction of note is the pessimistic risk reversal employed in the November contract. The investor sold 3,100 calls short at the November 41 strike for a premium of 2.30 each in order to finance the purchase of 3,100 puts at the lower November 39 strike for 2.30 apiece. Selling out-of-the-money call options allowed the trader to completely offset the cost of picking up put options. Profits are available on the trade if shares of the IYR decline about 4% to fall beneath the breakeven price of $39.00 by expiration. Evidence of bearish sentiment also appeared in the December contract in the form of a large-volume put spread. The transaction involved the purchase of 25,000 puts at the December 39 strike for 2.70 each and the sale of 37,500 puts at the lower December 34 strike for 1.10 per contract. The ratio of puts purchased to puts sold is uneven, thus paring the cost of the higher strike puts. Perhaps traders bared their bear-claws today because existing home sales reportedly slipped in the month of August.