WisdomTree India Earnings Fund (EPI) -- which offers exposure to "profitable companies in the Indian equity market" -- saw a spike in options trading yesterday, amid news of escalating tensions between India and Pakistan. In fact, options volume topped out at an annual high of 38,472 contracts traded in one session, with the bulk of the action occurring on the put side.

More specifically, 32,443 puts changed hands on Wednesday -- nearly 23 times what's typically seen in a single day, and a 12-month high. Nearly 60% of the day's put action went off at the April 23 strike, and it looks like new positions were purchased, meaning speculators are betting on a move back below $23 by back-month options expiration at the close on Thursday, April 18.

This burst of bearish activity is relatively rare in EPI's options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), options traders have bought to open 10,199 calls in the past 10 days, compared to just 70 puts -- the bulk of which occurred at the June 25 call.

Looking at the charts, EPI hit a familiar ceiling at $27.20 on Aug. 27, before falling to a 20-month low of $21.65 on Oct. 26. The fund rebounded back up to $25 by late December, but pulled back to $23, home to a 23.6% Fibonacci retracement of that aforementioned sell-off. A bounce from here has the fund testing resistance at its 80-day moving average, with the shares last seen up 1.4% at $24.03 on news Pakistan will release the Indian Air Force pilot it imprisoned earlier this week.