Large options trades some people have attributed to the mysterious investor know...
NEW YORK - Large options trades some people have attributed to the mysterious investor known as “50 Cent” have become more profitable in recent days, as fears of the economic impact of the coronavirus injected volatility back into stock markets.
Earlier this month, at least one investor bought large blocks of February calls on the CBOE Volatility Index .VIX at a price of around 50 cents each. Pravit Chintawongvanich, equity derivatives strategist at Wells Fargo, said the transaction resembles past moves by an enigmatic investor some market participants have dubbed “50 Cent,” known for purchasing large blocks of VIX options at prices near 50 cents.
According to Trade Alert, the VIX calls traded as high as $1.15 on Monday, so in total they could have generated some $21 million in profit if the calls were sold. However, there was “no sign of liquidation,” Trade Alert founder Henry Schwartz wrote. The calls were trading between 70 and 80 cents late Tuesday, as U.S. stock markets rebounded.
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