GO
Loading...

Season of Fear?

Monday, 23 Nov 2009 | 4:32 PM ET

Do options traders sense a holiday massacre?

There was a massive trade that went up on Vix options at the December expiry. Specifically, one customer sold 28,000 of the December 45-strike calls and then bought 56,000 of the December 60-strike calls.

Basically, this customer is betting that the VIX will stay below the 45-level by December expiration. However, if volatility goes crazy, said investor would profit as he/she is long those 60-strike calls.

"Basically, this customer is saying heads I win, tails I win," said "Options Action" contributor and Cantor Fitzgerald's Mike Khouw.

Questions, comments send them to us at: optionsaction@cnbc.com

Contact

  • Showtimes

    Fridays, 5:30p ET
    Saturday, 6a ET
    Sunday, 6a ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

Latest Video

Options Action Daily Reports

Sponsored Related Links

More on thinkorswim by TD Ameritrade

  • Make sure you’re always keeping up with the market with up-to-the-minute news and breaking stories. Move on possible breakout stocks and options with potential opportunity. Plus, get in-depth analysis on futures and forex in one seamless, integrated experience. Join TD Ameritrade and trade commission-free for 60 days + get up to $600 cash.

You Make the Call

  • Mike Khouw, Options Action trader, shares his view on News Corp stock on the heels of testimony from Rupert Murdoch before British Parliament.

  • Do you have a question for the Options Action team? Options Action selects a viewer's question and gives the answer on the show's Make The Call Web Extra video.