On Monday, with hopes that the VIX wouldn’t continue last week’s rise, an investor sold about $18 million of VIX calls.?
According to Bloomberg, the sell trade comprised 250,000 February 22 calls at approximately?70 cents each. This came after the VIX hit an 18.99?intraday high around 12:20 p.m. ET.?
Henry Schwartz, president of Trade Alert, said of the trade to Bloomberg,?”It’s impressive in size and it’s impressive in timing.?Whether it’s an outright bet against the VIX rising or hedge?against existing positions is hard to say. It’s a large account
for sure.”
In addition, the trade represented the “biggest single block of
?options to change hands on U.S. exchanges” and prior to Monday, the February 22 call contract had open interest at approximately?181,000.
Last week on negative news from China and Argentina, the VIX rose 46 percent to 18.14–its greatest jump since May 2010. Prior to last week’s expiration, VIX calls had a?record 8.4 million outstanding–more than double the amount in June, according to Bloomberg data.
On Monday, the VIX closed at 17.42, down four percent. ?At the time of this writing as the trading day is nearing its halfway point, the VIX is currently at 16.37, down 1.05 (6.03%).