Mike Khouw Sees Unusual Options Activity In VIX

Mike Khouw said on the show that a bullish bet in VIX index has caught his attention on Friday. Khouw explained that on a day with 3 times daily average call volume somebody bought around 100,000 contracts of the January 20/30 call spread. The VIX index is negatively correlated with the S&P Index and a rise to 30 for VIX would mean a significant decline in the S&P 500. Khouw added that it is interesting that the VIX is now trading higher because the S&P 500 didn't move lower as much, so it can be said that the VIX is leading the way.