27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
At one point, the total value of call options on the volatility index was worth tens of millions of dollars, and each time they likely expired worthless, as the volatility index continues to remain near multi-year lows.
But now a new mysterious trader is making an even bigger bet that a volatility spike is forthcoming, Pravit Chintawongvanich, head of derivatives strategy at Macro Risk Advisors highlighted during a recent CNBC "Trading Nation."The trader is making a large bet that the volatility index, currently sitting just below 10, will rise to at least the high-teens if not mid-20s, he explained. Specifically, the trader exchanged 2.1 million contracts on the index on Monday, which merely brings the total number of contracts traded to 3.15 million on the year.
However, it may be a mistake to assume that the trader's position isn't part of a broader hedging strategy.
"I think the person who is doing this isn't necessarily just betting outright that volatility is going to go up," Chintawongvanich said. "I think they probably own a lot of stocks, a lot of things that would go down if North Korea risk escalates, or maybe something else, tech stocks pull back."Bottom line, this mysterious trader most likely needs protection for their overall portfolio and with the volatility index hovering at "extremely low levels" this may be the best option available.
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This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
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