VIX Options –
On the VIX option front there were a couple of interesting things going on late last week –
First, this past Thursday there was some big trades in the July 16, 17, 18, & 19 Put contracts. This volume appears to be bullish with customers mostly selling or putting on Bull Put spreads. Remember, bullish on VIX is bearish on the S&P 500. These trades were done the day before the June employment report on Friday. This report was taken negatively by the stock market, which would normally have been a positive for the VIX. However, the VIX lost value as well on Friday. If these sales were based on a bearish employment number, they may have gotten the story right, but the trade wrong.
On Friday the longer dated out of the money calls were the most actively traded contracts. August 30 and 40 Calls, September 30 Calls, October 28 Calls and finally November 50 Calls all had nice volume. Buying these calls would be based on an outlook (or concern) that the S&P 500 may come under pressure in late summer or the fall.