A Mystery Investor Is Snapping Up VIX Options

A Mystery Investor Is Snapping Up VIX Options

Assessment

Interactive Video

Business

University

Hard

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The video discusses a mystery options buyer betting on a spike in the Fear Index (VIX), which has been low for over 50 sessions. The buyer, dubbed '$0.50', is speculated to be hedging another position, possibly involving corporate bonds or selling volatility. The VIX needs to rise significantly for these options to be profitable. The discussion includes potential hedging strategies and market predictions, with a humorous note on puns related to the buyer's nickname.

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2 questions

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1.

OPEN ENDED QUESTION

3 mins • 1 pt

What levels does the VIX need to reach for the calls to be in the money?

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2.

OPEN ENDED QUESTION

3 mins • 1 pt

What potential risks is the mystery options buyer hedging against?

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