Paper bought 25,000 LQD Sep 115 puts, sold 50,000 Sep 110 puts, and bought 25,000 Sep 105 puts.
iShares IBoxx $ Investment Grade Bond ETF, trading 119.05 (down .53) with an IV30 of 6.4% with an HV10 of 3.08% and HV20 of 3.6%, saw a large bear put fly trade.? The ETF, which has an ADV of 1,600 and an OI of 64,000, saw this fly trade more than 100,000 contracts in a single trade.? The customer bought 25,000 of the Sep 115 puts for 1.05, sold 50,000 of the Sep 110 put at .41 and bought 25,000 of the Sep 105 puts for .25.? Net they paid .48 for the 115/110/105 put fly.?
With the stock around 118.90 LQD the trader seems to think that the underlying is going to drop below 115 between now and Sep expiration.? Alternatively this could be an inexpensive hedge set up for a long.? Either way this is an opening trade and the trader is nervous about the underlying dropping over the next few months.
This trade should be considered bearish the underlying a neutral IV.