Options Trader Spends $9 Million Betting on September Volatility Spike
- VIX September call spreads trade upwards of 350,000 contracts
- Fed meeting, debate, economic data on tap in September
There are reasons for investors to be wary of stocks retreating.
Photographer: Alex Wroblewski/BloombergThis article is for subscribers only.
While many traders on Wall Street had a foot out the door for the long Labor Day weekend, at least one investor was buying protection against a September selloff.
An options trader or traders bought call spreads on the Cboe Volatility Index — or VIX — expiring in September, spending upwards of $9 million to protect against a spike in the gauge of S&P 500 volatility past 22 from its current level of just over 15. A jump to that level would bring the VIX back to where it was Aug. 9, when the market was recovering from a sharp selloff.