A trader who made a large bet on a stocks rocketing in the coming weeks is up about $23 million in paper profit today, according to Bloomberg.
The unknown trader spent $12 million premium on 6800 lots of 6950 S&P 500 Index Options (SPX) calls for May 8 expiry, when the index was at 6556.21; the trade was executed around 10:20 a.m. Eastern on Tuesday, just hours before Trump's announcement of a 2-week ceasefire which sent stocks soaring.
The trade was an “example of upside chasing on hopes of an imminent peace deal”, said Chris Murphy, co-head of derivatives intelligence, in an email Tuesday.
Following the ceasefire deal last night, stocks surged, with the long SPX 6950 position now trading at $50, Bloomberg pricing data indicates.
That makes the position worth $35 million as of noon on April 8, with the S&P 500 at 6773, or a $23 million profit net of the premium paid.
