OptionsHouse

Options Trading News

November 12, 2013  Tue 9:11 AM CT

VXX: SEE CHART GET CHAIN FIND STRATEGIES
A large and long-term bearish trade is targeting the iPath S&P 500 VIX Short-Term Futures Note.

optionMONSTER systems detected the purchase of 62,745 January 2016 20 puts for $3.75. The trader is spending more than $23 million on the position, which is betting that the VXX will be cut by more than half in the next two years or so. (See our Education section)

Yesterday it saw a trade in the opposite direction, looking for a floor in the stock.

The VXX is composed of the two nearest-month VIX futures. Because they typically carry a premium to the spot volatility index, the VXX has a structure that ultimately makes it tends toward zero. As a result,  it has already undergone three 4-to-1 reverse splits since its intiation in February 2009.

Today the VXX is down fractionally to $48.40, a new all time low. It can pop higher at a moment's notice, but the general trend is definitely lower. 
Share this article with your friends


OptionsHouse

Premium Services

Education & Strategy

Continue to melt up? Think debit call spreads

The U.S. equities market is continuing to melt up. Even though the labor market is stagnant, the Fed keeps hinting that a short term interest rate hike is coming sometime soon.

View more education articles »