Paper bought 5,000 JNK September 35 calls for .20 and sold JNK September 36 calls at .09 against it.?
The SPDR Barclays Capital High Yield Bond ETF, trading 32.34 (up .29) with an IV30 of 16.48 and an HV10 of 12.88, saw a long term call spread buyer today.? The ETF, with an ADV of 4,000 and OI of 140,000 contracts, saw a customer buy 5,000 JNK September 35 calls for .20 and sold JNK September 36 calls at .09 against it.? Net the customer bought the Sep 35/36 call spread for .11.?
This is an inexpensive play on a recovery in JNK between now and September expiration.? Considering the ETF was above 36 in November of 2015, about 3 months ago, a move like that is not out of the question.? Traders looking to piggy back may notice there are cheap alternatives in JNK Sep upside at the 33 and 34 strikes as opposed to moving near 10% OTM to set this trade up.
This trade should be considered bullish the underlying and mildly bullish JNK volatility