Market Overview

Huge Bullish Dollar ETF Call Volume Bet

Related UUP
Dennis Gartman: U.S. Dollar Trade In 'Only The 4th Or 5th Inning'
Not So Fast: Gold ETFs Could Surprise When Rates Rise
Week Ahead In FX: USD To Face Payrolls Challenge (Seeking Alpha)
Related UDN
Former Federal Reserve Officer: 'Mess In Russia Adding To A Flight To Safety In The Dollar, Treasury Securities'
ETF Outlook for Tuesday, December 10 (SOCL, CARZ, UDN, FPX)
Week Ahead In FX: USD To Face Payrolls Challenge (Seeking Alpha)

There was a major trade Tuesday morning in the December 22 Calls for the PowerShares US Dollar Index Bullish Fund (NYSE: UUP). The trader bought 14,777 contracts at 12 cents for the $22 strike set to expire in December of this year. The volume accounts for roughly 38 percent of the call volume as of 2:30PM EDT.  A similar transaction was noted by Bloomberg back in 2011 when a trader sold 25,000 contacts of the PowerShares DB Dollar Index Bearish Fund (NYSE: UDN) which accounted for nearly 100 percent of total volume as part of a bearish straddle used to hedge against what was, at the time, an expecter period of limited volatility.  

The trade is raising eyebrows today as more and more people begin to question the viability of the current multi-year bull market as time winds down to the Fed (aka the Elephant In The Room) decision to end QE before raising the Federal Funds rate.  Someone out there believes that volatility is set to return and as portfolios rebalance after Q2 earnings, expect lit market volumes to swell and volatility to be front and center in many discussions.  

Posted-In: Currency ETFs ETFs


Related Articles (UDN + UUP)

Get Benzinga's Newsletters