Option traders were greeted with a spike in volatility Monday as they got to work following a multiweek rally for the
Dow Jones Industrial Average
The CBOE Market Volatility Index (VIX), which is based on the implied volatility of the S&P 500 options and is used as a gauge for fear in the market, was recently up 2.6% to 11.93. The CBOE Nasdaq Volatility Index, a measure of the implied volatility of the Nasdaq 100, jumped 5.8% to 15.03.
The January 59 puts on the
iShares Russell 2000 Index
traded 20,000 contracts. Meanwhile, the January 67.50 straddle traded 5,000 times. The buyer of a straddle, a strategy involving puts and calls with the same strike price, expiration and underlying security, is looking to benefit from a large move in either direction.
The ETF was down 36 cents, or 0.5%, to $66.07.
options were active, with the December 25 puts trading 19,400 contracts and losing 10 cents. The January/March 25 put spread traded almost 10,000 times. Here, the trader appears to have sold the January puts and bought the March puts, what's known as a time spread. The stock was unchanged at $22.43.
December 25 puts traded 12,500 contracts, which is a little more than the open interest, possibly from a trader closing a short put position ahead of the company's earnings release on Nov. 16.
The April 25 puts changed hands 5,000 times and fell 10 cents. The stock was up 51 cents, or 1.9%, to $27.24.
had the January 2007 puts striking at 10 trade 12,400 times and the January 2007 puts striking at 7.50 trade 3,800 times. GM shares were down 34 cents, or 1.4%, to $24.14.
Other active options included
Cisco's November 17.50 calls traded 7,500 times, and its shares slipped 14 cents, or 0.8%, to $17.33. Citigroup's January 47.50 calls were exchanged 6,300 times, while its stock was off 3 cents to $47.97.
Microsoft's January 25 calls traded 4,100 contracts, and the January 27 calls moved 10,000 times. The stock was up 13 cents, or 0.5%, to $27.41.