Huge put trade dominates SPY action
Chris McKhann | firstname.lastname@example.org
optionMONSTER systems show that more than 230,000 March Quarterly 135 puts and more than 90,000 March Quarterly 147 puts traded in tandem.
Before lunch a trader bought 20,000 of the 147 puts for the ask price of $1.23 and sold 40,000 of the 135 puts for $0.22. An hour later, 22,000 of the 147 puts were bought for $1.21 and 44,000 of the 135s were sold for $0.22. Finally, in the afternoon, a block of 36,000 of the 147 puts were bought for $1.15 and 108,000 of the 135 puts were sold for the bid price of $0.21.
These were all new positions, as the volume was above the previous open interest of 20,784 at the 147 strike and 46,285 at the lower strike.
This put vertical, which is also a ratio spread, is looking for lower SPY prices. The trade, which followed an earlier call ratio, takes a maximum profit if the SPY is down around $135 at that expiration at the end of March. (See our Education section)
The SPY finished the day up fractionally at $152.02, another new five-year high for the exchange-traded fund. It has been trending higher from the support at $135 in the last three months.