Swiss Stocks Blindside Traders as Volatility Soars 66%: Options

If anyone saw Switzerland’s central bank coming, they didn’t do much about it in the options market.

A contract that paid out should the benchmark Swiss Market Index drop to 8,150 by today from around 9,200 had no volume for the last week. That changed yesterday, when the Swiss National Bank’s move to abandon its currency peg against the euro sent shock waves through markets. A rout in Swiss equities spurred traders to snap up 4,300 of the puts in a matter of hours, sending the price soaring from a few centimes to more than 15 francs -- a jump of about 15,000 percent.