Sears is a regular contributor to
Barron’s. I doubt this story has any practical application, but it is fascinating and perhaps adds clarity to how the options markets / VIX volatility gage operate.
Excerpt:“Amid the gloom, one trade looms so unusually pessimistic that it is hard to process because the world would likely need to end, or come close to it, for it to prove profitable. The trade is predicated on the Cboe Volatility Index, or VIX, hitting 150 by March, a level that has never before been realized. The so-called fear gauge was recently around 32. In recent sessions, an investor bought 50,000 VIX March $150 call options, paying about 19 cents per contract. The trade is so large, and so unusual, that it was almost certainly made by a wealthy investor worried about a massive stock market decline, perhaps triggered by Armageddon, or something approaching it.”Source / Barron’s (The above likely requires subscription to
Barron’s to access.)
Comments
That rich investor may be Elon Musk> Elon Musk supports Russia keeping Crimea—because he’s worried about nuclear escalation and World War III ('Fortune.com'.)
He also had a song for WWIII.