S&P500 Put Options Volume Explodes

  • Posted by on May 17th, 2012 at 4:09 pm
  • Comments: 0

Options traders are going bananas today buying Put Options on the S&P500. They can’t get their hands on enough of them. The one million contracts level was hit with over half an hour left in the trading day. This number represents 2 1/2 times the average daily volume for these particular contracts.

Bill Luby over at VIX and More nailed it with this chart. It shows how the S&P500 ‘puts in’ important bottoms when options traders get the volume up over a million contracts.

“The one million level is rarely seen in SPX puts and generally indicates an extreme amount of hedging on the part of institutional investors, as well as increased speculative activity.”

(Click Chart to Embiggen)

 

We saw the S&P500 make important lows in November last year, August before that, June, and again in February of last year all when Put Options contracts exceeded one million. Will history repeat itself?

 

Source:

A Million SPX Put Contracts Traded Today…. A Contrarian Timing Signal (VIX AND More)

Tags: $SPY $ES_F $SPX


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