Curious Repeat Buyer of VIX Puts: What is interesting is that they not take off their winning trade from Tuesday.? This appears to be a double down on low vol.?
Curious Repeat Buyer of VIX Puts
On Tuesday a customer bought 175,000 of the VIX Dec 12.5 puts paying from .09 up to .13.? Today, it appears the customer has returned buying 175,000 of the Dec 11.5 puts for .05.? These puts would do best if the underlying settles a week from Wednesday below 11.45.?
What is interesting is that he or she did not take off their winning trade from Tuesday.? This appears to be a double down on low vol.? The customer apparently believes that the market will be slow for the next week or so leading into VIX expiration.
Traders looking to piggy back could buy the Dec 12.5/11.5 put spread for around .20 as a way to trade with this customer but potentially hedge the risk of VIX expiration NOT Being near lows for the year.
Avon Is Calling, except it was Selling Puts in AVP
Today in Avon Products (AVP), home of the ?Avon Lady,? a customer appears to have sold just over 51,000 of the Jan 9 puts at .20, tied with some stock. This appears to be a closing trade as open interest on the strike is near 58,000 contracts.
The customer likely was using these as some sort of hedge against an existing long positon.? It will be interesting to see if the customer moves to roll out of these puts or if he or she is willing to go naked long.? We will be on the lookout for a similar sized trade in Jan 2016.? If not it could be the customer is willing to go long at current levels of AVP.
Betting on Interest Rate Move in XLU
With today?s jobs report there is a chance that interest rates could move earlier than traders were expecting.? Today a trader made a bet that interest rates might start to move affecting the utility sector.? A trader or traders have bought in size the January 45 puts from .72 paying as high as .76.? In total just over 19,000 of these puts have traded moving the IV up by about .50 in January.
The customer is betting that XLU will be trading at least .76 below 45 dollars a share by the end of January, which is 43 days away.
Traders looking to piggy back could consider selling the 46/47 call spread at .35 as a way of playing, at a minimum that the underlying is not going keep rallying.