Investor Makes Mammoth VIX Bet That Could Pay Out $265 Million

Discussion in 'Wall St. News' started by Chuck Krug, Jul 25, 2017.

  1. Just as VIX is well on its way to hit a new all time closing low... If Oct VIX futures end up settling arnd where we are now, this trade will lose arnd $67mio.
     
    TraDaToR likes this.
  2. I wonder who it is.
     
  3. TraDaToR

    TraDaToR

    1/4 risk/reward... You find it too low?
     
  4. SteveM

    SteveM

    Heads I lose 1, tails I win 4 is a good trade as far as I am concerned.
     
  5. algofy

    algofy

    I'm not sure it's a 50/50 proposition.
     
    JackRab and lawrence-lugar like this.
  6. This trade's risk isn't necessarily limited to the number I've given. Its reward, on the other hand, is capped at the max given in the OP's article.

    This is what the payoff looks like at expiry:
    vix monsta.jpg
     
  7. newwurldmn

    newwurldmn

    And you have to be crazy precise to earn that reward. When does the VIX hit 25 and vix vol (and vixset volatililty) remain low?
     
  8. Ye, given the sheer size of this thing, it's baffles me bigly...
     
  9. newwurldmn

    newwurldmn

    is it possible that the news services got the side wrong? the other side sounds a lot better as a tail hedge.
     
    #10     Jul 25, 2017