I was sitting here minding my own business, half-listening to Bloomberg when they started talking about a huge option trade on $IWM. This is the iShares Russell 2000 Index. The trade was a 150,000 block of the November 68 calls. Yes, 150,000. That’s a huge trade, and on the surface very bullish, so I started looking. In fact it looks like a big institutional ratio trade. It was paired with a 75,000 block of November 63 calls. The trade cost about ~0.30. And it was probably more of a hedge against some huge short positions, but it’s still interesting to study this trade.
The risk profile looks like this;
If you’re worried about a bounce off these levels, this might be a good trade. Good luck into the close.