Another $10 Million VIX Block Trade Has Emerged
All parties were on high alert, yet the negotiations concluded smoothly. The previously anticipated sharp drop to 640 or even 600 didn't materialize. Does that mean no decline is coming? Not necessarily. The anticipation artificially inflated the market beforehand, effectively creating room for a pullback. As the saying goes, if there's no pullback room, create it.
A block trade bought the $VIX 20251217 33.0 CALL$ with volume of 123.2k contracts, amounting to $10.96 million. Expect SPY to potentially experience another 3% pullback.
However, the tech stock gains over the past two weeks weren't entirely driven by negotiation expectations; AI-specific demand also played a role. Therefore, the timing of the pullback might come after the "buy the rumor, sell the news" effect, perhaps after the earnings season wraps up. We'll have to wait and see.
A significant bearish order complements the VIX call buying: bears bought 25k contracts of the Jan '26 240 put $AMD 20260116 240.0 PUT$ , totaling $40.5 million.
Nevertheless, the stock will likely oscillate around 260 until earnings and the analyst day.
After breaking through the $5 trillion mark, Nvidia has become an ideal target for option sellers looking to collect premium: solid fundamentals, massive market cap, making it somewhat like a mini-SPY (though SPY is undoubtedly much more stable).
The institution's strategy for the 7th was a bull call spread: sell the 210 strike call and buy the 217.5 strike call $NVDA 20251107 210.0 CALL$ $NVDA 20251107 217.5 CALL$ . Another group was sell the 212.5 / buy the 222.5 strike calls. Downside is expected to hold above 200 $NVDA 20251107 200.0 PUT$ .
$KraneShares CSI China Internet ETF(KWEB)$
Bullish opening activity in KWEB: bought 90k contracts of the Jun '26 48 call $KWEB 20260618 48.0 CALL$ , with a notional value of approximately $18 million. The Chinese internet bull market is expected to continue.
The bond issuance isn't a major concern, so any price drop presents a good opportunity to sell puts. Some bulls even initiated positions by buying the 720 call $META 20260116 720.0 CALL$ . I find that slightly aggressive, as bottoming after a >10% decline typically requires some consolidation.
I think selling puts at the 650 strike is feasible, but it might be wiser to choose a strike below 640 for more conservatism. The safest bet would be the 600 strike $META 20251107 600.0 PUT$ .
For those seeking a cheaper, leveraged play, check out the 2x leveraged ETF $Direxion Daily Meta Bull 2x Shares(METU)$
The institution's opening orders for next week are as follows: $CRWV 20251107 143.0 CALL$ $CRWV 20251107 123.0 PUT$ $CRWV 20251107 110.0 PUT$
This suggests a projected trading range for the week of the 7th roughly between 123 and 143.
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