Posted on 02/06/2013 7:21:55 AM PST by blam
Some Trader Has Made A Very Big Bet That Something Very Bad Will Happen Within The Next 60 Days
Sam Ro
February 6,2013
CNBC
Stocks have been rallying relentlessly to post-crisis highs.
Meanwhile, the volatility index (aka the VIX, aka the "fear index") is near historic lows.
But according to UBS's Art Cashin, some options trader has made an enormous $11.25 million bet that the VIX will explode higher very soon.
And a rally in the VIX is usually accompanied by a drop in the stock markets.
From this morning's Cashin's Comments (emphasis ours):
A Very Big Bet In A Somewhat Unlikely Instrument My friend, Jim Brown, the ever-alert consummate professional over at Option Investor pointed us to a rather unusual trade. Here's what he wrote in last night's edition of his valuable newsletter:
In past years I have reported on trades that were so large it appeared someone had inside knowledge of a pending event. Sometimes those were massive put positions on the S&P. A new trade just appeared that suggests there will be a market event in the near future. Last week somebody put on a call spread on the VIX using the April 20 and 25 puts. They bought 150,000 contracts for a net of $75 per contract. That is an $11,250,000 bet that the VIX will move over 20 over the next 60 days. You would have to be VERY confident in your outlook to risk $11 million on a
(snip)
Jim then goes on to list some of the scheduled events and deadlines visible over the next 60 days (mostly in Washington). When you add in the broad variety of geo-political possibilities, it's a decent reason to stay extra alert.
Hopefully, this person is wrong.
(Excerpt) Read more at businessinsider.com ...
It's even scarier for me...I think they won it.
Yeah I miss him too.
Same thing happened to FReeper RightWhale...here one day, gone forever the next. No-one knows anything.
If they bought puts they’d be betting that the VIX would go down, not up.
Not quite, The Comedian told us he was going to vanish from FR, then he did.
I just didn't think his web site, email and phone would all go dark as well.
I think of RightWhale every time Alaska is in the news.
$11 million isn't that big of a bet on Wall Street.
What's interesting is the chosen trading vehicle...
This is the 3rd or 4th time...I've heard someone say...in the next 60 days..something big will happen.
We shall see..........
HMM
Beware the Ides of March...
Same with BP2, Natural Born 54 and many others. You’d think if they were taking a leave of FR they’d say so so we wouldn’t be left worrying.
Thanks blam for the heads up!
The Economy just might go Bottoms Up.
Scared and shaken now with fright,
Knowing that our politicians might,
Wait to watch the Treasury Bubble burst.
As we lemmings our trust must hinge,
President Jarrett will have her REVENGE!
Thanks for the Ping...interesting
I concur with blueyon, LucyT.
The 20 and 25 are prices, not dates
Whoever the investor is, probably would have done better in gasoline futures.
Thanks for the ping and info Lucy.
Reports like these are the reason I NEVER leave home without my GO bag.
Stay safe folks.
I hope he’s OK. I miss him also.
Natural Born 54 is OK. Busy with other stuff.
I am certain he is. This isn't a random disappearance, he planned it and prepared for it.
I'm more worried if we are OK, given his eye on our future...
I was just thinking how I hope existence ends up being such that we get answers someday. When the books are all opened, maybe. Maybe it just won’t matter to us any more, but I’m hoping we’ll get answers first. Otherwise life is sort of like the “shave and a haircut” without the last 2 notes; seems like a great big question mark.
And then I thought how much I hope I get to meet all you guys - my friends here at FR - that Day. There’s not a lot these days that I look forward to, but thinking about that gave me just a flash of the same kind of eager anticipation that you have when you know the 4th of July is coming and all the cousins will be over for a weiner roast, swimming, and fireworks - complete with watermelon, pie, kolaches, baked beans, potato salad, macaroni salad, homemade buns and fresh coarse-ground weiners from the butcher...
Right now it makes sense to go off the grid. Things may get pretty bad. I do hope the Day will come when we won’t have these worries any more and we can all just be together. Even if that sounds stupid or unbelievable, I hope you can sense the fond desire for my kindred spirits here. There really is something we’re all fighting FOR. Each other.
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