Don't see that link I read on ZeroHedge in July, try again.
my comment: They most likely closed(buy), by buying, the PUT options they sold(short premium) that have been crushed by this spike in the VIX to 16+ (see chart in comment below)..and replace them. They might adjust, sell, their long premium, CALLs bought as well.
" "New sanctions on Russia while Mueller is investigating the Trump business and financial dealings (and 'wheelings'). The plot is thickening.
BUTTERFLY, So strangling short premium the out-the-money calls ( the 2 out of the 1x2 ratio call spread the OTM 25 strike price) VIX is trading just below 10 and just above 10 for awhile now. the other side of the strangle is the short premium PUTS 12 strike so trading in the money thus delta is such the receive almost 60 to 70 delta on those i'm guessing. the other positions are the long premium CALLS 12 strike thus OTM as well. I'm sure they will be making adjustments as the short premiums get near cabinet(worthless).
The short 12 PUTS and the two long premium 12 CALLS are two synthetic long positions and this makes a lot of money only if VIX options expire at or slight above 25 and has unlimited downside risk to zero.
"A Mystery Investor Just Made A $262 Million Bet That The Stock Market Will Crash By October
Tyler Durden's picture
by Tyler Durden
Jul 24, 2017 10:21 AM
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Authored by Michael Snyder
One mystery trader has made an extremely large bet that the stock market is going to crash by October, and if he is right he could potentially make up to 262 million dollars on the deal. Fortunes were made and lost during the great financial crisis of 2008, and the same thing will happen again the next time we see a major stock market crash. But will that stock market crash take place before 2017 is over? Without a doubt, we are in the midst of one of the largest stock market bubbles in U.S. history, and many prominent investors are loudly warning of an imminent stock market collapse. It doesn’t take a genius to see that this stock market bubble is going to end very badly just like all of the other stock market bubbles throughout history have, but if you could know the precise timing that it will end you could set yourself up financially for the rest of your life.
I want to be very clear about the fact that I do not know what will or will not happen by the end of October. But one mystery investor is extremely convinced that market volatility is going to increase over the next few months, and if he is correct he will make an astounding amount of money. According to BI, the following is how the trade was set up…
To fund it, the investor sold 262,000 VIX puts expiring in October, with a strike price of 12.
The trader then used those proceeds to buy a VIX 1×2 call spread, which involves buying 262,000 October contracts with a strike price of 15 and selling 524,000 October contracts with a strike price of 25.
For reference, bullish call spreads are used when a moderate rise in the underlying asset is expected. Traders buy call options at a specific strike price while selling the same number of calls of the same asset and expiration date at a higher strike.
In a perfect scenario, where the VIX hits but doesn’t exceed 25 before October expiration, the trader would see a whopping $262 million payout.
I will be watching to see what happens. If this mystery investor is correct, it will essentially be like winning the lottery.
But just because he has made this wager does not mean that he has some special knowledge about what is going to happen."
