What’s behind put surge in VXX

An unusual put trade is hitting the iPath S&P 500 VIX Short-Term Futures Note as it continues to see new lows this morning.

A block of 6,833 July 31 puts were sold for the bid price of $1.82 against previous open interest of 17,785. At the same time, 13,666 July 27 puts were bought for the ask price of $0.22 in volume that was 4 times the open interest at that strike and therefore a new position.

This could be a backspread, which would mean that the trader is positioning to profit if the VXX is above $31 or if it continues to drop precipitously. (See our Education section)

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