Market Overview

Dan Nathan Sees Unusual Options Activity In SPDR S&P 500 ETF Trust


Dan Nathan spoke on CNBC's Options Action about the price action in SPDR S&P 500 ETF Trust (NYSE: SPY). He said that the options trading volume was almost two times higher than the average daily volume on Monday and the puts outnumbered calls three to one.

Nathan noticed one big trade that took place in the morning session as one trader tried to monetize a hedge. The November 185/180 1x2 put spread was sold to close for a $1. This means that the trader no longer believes that the S&P 500 is going to trade below $184 at the November expiration.

The volume in the early session was lighter than the Friday's volume, but when the S&P 500 broke the critical technical support the traders rushed to put the hedges back on and the volume increased, added Nathan. He also explained that the volatility spiked to 18, which is its two-year high.


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