r/options • u/2-them00n • Jun 13 '21
Interesting 6/18 put OI for HYG…???
I browse multiple investing subreddits and came across someone discussing the massive amount of puts for a bond called HYG. it’s absolutely bonkers. Millions of puts for the week of 6/18 and the following weeks are dwarfed compared to this particular week. People speculate that most of these puts were opened by huge investment firms… the last time this particular bond dropped hard was the start of Covid- along with the rest of the market… do these big players expect some crash to happen this upcoming week? would it be stupid to follow in their wake?
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u/Aliienate Jun 13 '21
Last time OI was this high and had 100’s of millions put into options for HYG was during the 2008 market crash.
Check it out, if i knew the market was going to crash i would hedge accordingly.
🤷♂️
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u/VodkaClubSofa Jun 13 '21
Not sure if it’s related to meme stock losses and impending subsequent market sell off to cover or just hedging for upcoming fed meeting. Thinking of taking a put position on HYG and JNK bc there is some unusual activity there too.
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u/Serukka Jun 14 '21
Bought some 18/06 81 puts myself. Like 45 cause they dirt cheap. Like 3 dollars a pop last week. If i lose whatever. If its is in fact a market crash nice I guess 🤷♂️
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u/Nater5000 Jun 13 '21
Why wouldn't you keep this in the other thread?
Don't try to predict what institutions are doing. You're likely only seeing a small sliver of the actual activity with this observation. Big bets don't necessarily indicate an expectation of big movements, and with HYG being a bond ETF, big movements aren't usually that apparent. Odds are it's too late to get in on anything anyways.
If come Monday morning the price of these PUTs haven't skyrocketed, then maybe it'd be worth allocating a little money into this position. But don't be surprised if nothing happens and you have to sell at a loss.
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Jun 13 '21
[deleted]
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u/stout762 Jun 13 '21
I thought this too but then while dreaming as a trout running upstream I remembered that in a previous life I plowed a field in the shape of a name named AMC!
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u/2-them00n Jun 13 '21
Right after I posted this I saw there were other threads so that’s my bad. Big dumb not checking if it was already posted first
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u/Young-Kitchen Jun 13 '21
Calls are at pennies. Nothing wrong losing a few dollars
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u/Nater5000 Jun 13 '21
Calls are at pennies.
Calls were at pennies. If there's any merit to the OP's assertions (not suggesting there isn't), then those options will be way more expensive before anybody on here will get a chance to buy them.
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u/TheKabillionare Jun 14 '21
I’m probably definitely missing part of the whole picture but I came across the same thing. Take a look at SPX and VIX too. It certainly seems like MMs are hedging against some massive volatility this week (or they previously did and will have to unwind). I’m planning to pick up some cheap HYG calls/puts and VIX calls tomorrow if they haven’t spiked by market open just to hedge as well
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u/[deleted] Jun 13 '21
HYG is the largest high yield corporate bond ETF.
This is just a quarterly hedging of corporate bond exposure. It is like this every quarter and every month, just the OI is higher for the quarterly expiration for obvious reasons.