Trader Bets $16.7 Million on Increased Stock Market Volatility with 250,000 VIX Call Contracts as 10-Year Treasury Yield Jumps to 4.07%

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A trader recently dropped a cool $16.7 million on about 250,000 call contracts tied to the VIX Index, betting on increased stock market volatility.

This isn’t your average move – the strike price is 17, expiring on Feb. 14. With the VIX not breaking 17 since November, it’s got everyone buzzing. Seems our trader senses some serious turbulence ahead.

But that’s not all; the 10-year Treasury Yield just skyrocketed to 4.07%, marking its highest point in a month. What’s cooking in the financial world? We’re about to find out!

VIX trader drops US$17M on bet that eerie stock market calm won’t last

A trader snapped up call options tied to the Cboe Volatility Index, positioning for a pickup in stock market swings within the next month.

A trader bought about 250,000 call contracts on the VIX Index with a strike price of 17 that expire on Feb. 14. The trader spent about US$16.7 million in premium, with each contract costing between roughly $0.63 and $0.67. The VIX hasn’t traded above the 17 level since early November.

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“It’s hard to know if it’s an outright bearish bet on the market, or an aggressive portfolio hedge after a big move,” said Steve Sosnick, chief strategist at Interactive Brokers. “Either way, it expresses concerns that we could see a bit of a pullback during or after earnings season.”

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