Interesting and Record Days at The CBOE

Friday volume at The CBOE hit 10.8 million contracts. With C2 reporting an additional ~530,000 contracts, it turned out to a busy day for options. CBOE’s Friday’s volume eclipsed the 10 million contracts traded Thursday. Industry volume Thursday set an all-time record of 36.1 million contracts, shattering the old record of 30.8 million. Final US option volume today has not been announced, but it looks like roughly 39 million contracts changed hands. VIX options and futures volume set records today as well.

Looking at the SPX, VIX and DJIA closing prices it looks like it might have been a sleepy summer day. The VIX closed at 32.00, up 0.34 on the day, but hit 39.25 mid-day! SPX closed down 0.69 and the DJIA was higher by 61 points. I was in and out of educational sessions most of the day, but was in the SPX pit as the DJIA rallied from off 200 points to up 130 in (what seemed like) minutes. 

At 32 the VIX is not cheap, but on Monday we might find out if the spike to 39+ was a blowoff and the beginning of stocks rebounding or a short-term pause. Bond traders are as confused as stock and option traders, with the 2-year trading at a Negative yield (!) yesterday, and the 10-year closing at 2.4% today. Will the bank charging clients to deposit money start a run on matress companies? 

Late morning sure felt like capitulation to me.

Marty Kearney