Technology SPDR (XLK) - Enormous 1 Sided June Option Action

[atticus]

$1.3MM in premium, so it's probably some buy-side equity shop buying cheap gamma/dgamma in tech. It's unlikely it's a vol-hedge against another ticker, as anyone spreading would do the ATMs to gain sensitivity. I doubt he's trading the synthetic put that deep, but who knows.

 

[livevol_ophir]

Quote from atticus:

$1.3MM in premium, so it's probably some buy-side equity shop buying cheap gamma/dgamma in tech. It's unlikely it's a vol-hedge against another ticker, as anyone spreading would do the ATMs to gain sensitivity. I doubt he's trading the synthetic put that deep, but who knows.

Agreed 100%. Not likely a hedge, a straddle or a put... Just kinda a long shot.

 

[failed_trad3r]

Quote from livevol_ophir:

Agreed 100%. Not likely a hedge, a straddle or a put... Just kinda a long shot.

so, the second 37k calls is people bettting that the first better knows something?

 

[livevol_ophir]

Quote from failed_trad3r:

so, the second 37k calls is people bettting that the first better knows something?

Or a double down at a better price.

 

[Jerkstore]

Quote from livevol_ophir:

Or a double down at a better price.

This is a strange bet. If the calls were a bit meatier, I would suggest that it was a hedged (delta neutral) and a bearish market bet. This doesn't really make sense with .15 calls though.

Since we're throwing out theories, I would guess that this trade is an upside hedge against a huge portfolio of upside short volatility in other tech products.

The trader probably sold 1000 20 delta calls in various other tech products, the upside portfolio gap risk was showing blowout type of numbers, and the risk manager forced an upside hedge.