The orange will drop all tariffs on china if SP goes down another 5 %, look at his twitter feed... Full blown panic talking to himself, mentioning china non stop, then he asks xi for personal meeting on twitter Big cohones behind the trade tho... 3.5 Billly potential profit, the traders bonus is fuck you money if he's right
The 315/320 call spread was for 110,000 contracts and 270/276 short put spread was for 11,000. Now I am intrigued.
I did a count of monthly changes on SPY for 15 years and chances are good it will be up. But that's a big bet, so they must be offsetting some short positions? TOTAL MONTHS = 178 DOWN MONTHS = 60 UP MONTHS = 118 %UP MONTHS = %66.3 AVG PCT UP = 3.04 %DOWN MONTHS = %33.7 AVG PCT DN = -4.03 AVG MONTHLY RETURN = %0.66 DROPS >= -8% = 7 UP IN A ROW ONE IRUP = 17 TWO IRUP = 7 THREE IRUP = 6 FOUR IRUP = 4 FIVE IRUP = 2 SIX IRUP = 1 SEVEN IRUP = 2 EIGHT IRUP = 0 NINE IRUP = 0 TEN IRUP = 1 DOWN IN A ROW ONE IRDWN = 27 TWO IRDWN = 11 THREE IRDWN = 4 FOUR IRDWN = 0 FIVE IRDWN = 0 SIX IRDWN = 0 SEVEN IRDWN = 0 EIGHT IRDWN = 0 NINE IRDWN = 0 TEN IRDWN = 0
If this is the average you're getting for 15 years of SPY returns, you'll need to recalculate. https://screener.fidelity.com/ftgw/etf/goto/snapshot/performance.jhtml?symbols=SPY
My data is simply third Friday close to third Friday close. Just shows what might happen if monthly option spreads were done and held until expiry, for 15 years. Granted, not the best way to trade it.
Bloomberg editor is a math-incompetent-clown. How do you make 3.5 billion from 110,000 $5 wide verticals??? More like "cheddar please, medium well" is what he needs to listen to.
If the guy has a big short equity position against this options position, he is going to get murdered on those long vega call spreads on a vol imploding rally where the VIX goes back to 15%. The all-time highs in the SPY are like 302. Not a chance in hell we make new all-time highs this Oct with the Chinese holding out until at least next years election, and the rest of the world entering into a recession. I would have loved to have taken the other side and slightly under-hedged it, and then bought extra put spreads to hedge against the short vega and the call steepening on a market melt-down. Crap trade. Guy will probably get fired.
Quote from article: "The $315 calls, if fully exercised could yield a net position of about $3.5 billion for the investor." Net position........ not profit.
K, so if he fully exercised the calls, how much would he be on the hook for on the puts that same day?