Here's where we run our caveat that we don't know the rest of the investor's portfolio and so don't know if this is a directional bet, a hedge or some type of term-structure play in combination with other strikes/spreads.
From Barron's The Striking Price column:
Meet the Biggest Bear
Recent trading by one major investor implies that he sees the VIX, now around 16.8, more than doubling by August.
After spiking early last week to a level associated with the start of a bearish stock market, the Chicago Board Options Exchange Volatility Index, or VIX, is once more telegraphing a sanguine message for investors.
If right now it seems that too many crosscurrents exist in the world for you to be anything but hedged and on edge, well, you're in good company. Truth be told, you might not be paranoid enough. Recent trading by one major investor implies that he sees the VIX, now around 16.8, more than doubling by August.
Should that prediction prove prescient, the stock market will plummet before summer's end in a decline so violent that the recent market gyrations that frazzled so many bulls will seem like a pleasant day at the beach.
This ultra-bearish investor, whose identity is unknown, bought 108,000 VIX August $28 calls and sold 108,000 VIX August $37.50 calls when the fear gauge was just under 18. The call spread—that's the strategy of buying a call and selling another with a higher strike price and identical expiration—cost 60 cents, or $6.5 million total, when executed Wednesday....MORE
