At least one big trader believes we're going to see a large rise in volatility by April

Jay Soloff

Argonath Financial

At least one big trader believes we're going to see a large rise in volatility by April. The options world is abuzz over a massive purchase of VIX calls. To be specific, 40,000 April 22 calls were bought on the benchmark volatility index for a price of $1.28 each. That amounts to over $5 million in premium dropped on the trade. The position will be profitable if the VIX closes at $23.28 or higher on April expiration. That's almost exactly 50% higher than the current closing price of $15.54, and above the long-term historical average of roughly $20. The trade could be a speculative bet on rising volatility (the VIX could spike to $23 in about a day). Or, this could be a massive hedge against a long equity position. Either way, it's a newsworthy trade. (VIEW LINK)


3 topics

Jay Soloff
Jay Soloff
Research Analyst
Argonath Financial

I'm an investments analyst for a US-based independent investment research firm. My focus is on economics, options, and all types of stocks, but especially tech, Internet, and renewable energy companies. I have experience as a options market...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.