Big Bullish Trade Hits the SPX Yesterday

Sean the intern is now Sean the employee at a market making firm on the floor of the CBOE.  He keeps in touch and sent me an interesting article that showed up on Bloomberg yesterday.  The headline –

Options Trader Bets $16.6 Million on 9% S&P 500 Rally

Apparently yesterday an hour or so after the open there was a buyer of four different call options that base their value on the S&P 500.  The trader (or firm) bought 17,800 SPX Mar 1925 Calls, 4,300 SPX Mar 1850 Calls at 15.90, 8700 Jan 1920 Calls at 1.00 and then 1800 Jan 1850 Calls at 5.80.  The total cost of this trade comes to the $16.6 Million quoted in the headline.  It appears someone has their eye set on a end of year rally for 2013 and a strong first quarter of 2014 in the S&P 500.

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Russell Rhoads, CFA

CBOE Options Institute

Russell Rhoads, CFA, is a Senior Instructor with the Options Institute at the Chicago Board Options Exchange. He joined the Institute in 2008 after a career as an investment analyst and trader with a variety of firms including Highland Capital Management, Caldwell & Orkin Investment Counsel, TradeLink Securities and…

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  • http://www.optionpit.com Mark Sebastian

    That trade looks a lot more like a hedge than a bullish bet