Big VIX Option Trading… Volatility Looming? (VIX)

Posted in Options 
November 24th, 2010

Out of the money calls are often a Hail Mary, and out of the money calls on the volatility index  is a derivatives bet on top of a derivative bet that the markets could head south or that wild price fluctuations will be seen.

The stahndout options trade today is hard to judge so we are not going to call it a new bet nor a  close-out trade.  Options traded on the VIX, the CBOE S&P 500 Volatility Index…. There have been 21,272 contracts trades of the FEB-2011 $35 CALLS versus an open interest of almost 49,000 contracts.

We have also seen over 2,100 of the FEB $25 CALLS and 10,000 of the FEB $27.50 CALLS trade today.

JON C. OGG

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