That, if you're unaware of what you're looking at, is the option chain for the "XLF", the financial sector "spyder" ETF, for April expiry.
The April $16 and $17 PUTs have enormous open interest. The $16s have been there for quite a while.
The $17s, however, have not.
At first blush you'd look at this and think it was a spread, which is not all that unusual. But then you look more-closely and on 1/24 you find that 50,000 $17 PUTs were opened against 44,000 open interest (approximately) and that was all the material movement through the end of the month.
[Related -A Delicate Balance For US Macro Outlook Via Treasury Yields]
Then, on the first of February, an obvious spread appears to have traded for 25,000 contracts.
And then the big daddy appeared -- a monster set of trades on the 5th -- and both "stuck" the next day.
That is, these were not daytrades. They're positional. And they're still there.
Assuming this was a "spread", the person executing it spent about 20 cents. Since each option is 100 shares this is $20.00 times 100,000 (approximately), or $2 million.
[Related -Two Firms On The Cusp Of A Major Turnaround]
On a 10% decline they will net 5x their bet, or $10 million.
If the decline is larger they get nothing more, as the short PUT sold against the long (assuming it's a spread) caps their profit. But that's a hell of a lot of money to slap on the table -- unless you know something.We'll see if the person who placed the trade indeed does.