The A-Hole Returns
If you are an avid GBA reader you know a ways back I was furious about some " whale " who had made a huge wager on the VIX going very high and stood to lose alot which he did every cent!!!!
Well guess who's back? From the desk of-
Rich White People With Nothing Better To Do...
One Trader Bets the VIX Index Will Triple in Next Three Months
4
One Trader Bets the VIX Index Will Triple in Next Three Months
(Bloomberg) -- Hotter-than-expected private hiring data has woken up Wall Street’s chief fear gauge after weeks of quiet in volatility markets. One trader is betting it’s just the start of a new round of turbulence.
An investor placed a bet on Thursday morning that the Cboe Volatility Index, known as the VIX, will soar above 45 by mid-October, a level that’s more than triple the gauge’s Wednesday close. The VIX hasn’t been that high since the aftermath of the Covid-19 pandemic market crash in April 2020.
The trader bought about 83,000 call contracts expiring on Oct. 18 in a single block trade, paying about $4.5 million for them, while simultaneously selling about 27,700 VIX calls with a strike price of 27 and the same expiration date to offset the cost.
“This is a classic VIX tail hedge where the investor is looking to capitalize on a near-term spike in VIX and VVIX,” said Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, referring to the VIX and another gauge of expected volatility in VIX options. “This position is typically closed well before expiration because once it’s closer to expiration, decay of the October 45 calls begins to set in.”
While the trade is by no means huge —
the investor spent a net of about $665,000 —
