Options Trading News

December 11, 2013  Wed 9:35 AM CT

Traders are seling calls in the iPath S&P 500 VIX Short-Term Futures Note even as it moves higher.

optionMONSTER systems show that a trader sold 4,953 June 55 VXX calls for $5.33. The previous open interest was just 831, so this is a new position.

The calls may well have been sold naked, given the nature of the VXX. It is composed of the two nearest-month VIX futures, which usually carry premiums to the spot volatility index. That explains most of the tremendous losses that the VXX has seen in the last four years since its inception. (See our Education section)

It is trading at $45.88 this morning, up 2 percent on the day. It was at an all-time low of $43.98 two weeks ago and at $147 at its 52-week high.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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