There recently has been an unusual amount of options activity in iPath S&P 500 VIX Short-term Futures ETN (VXX). VXX is a popular product for trading short-term market volatility. The ETN tracks the first two futures of the VIX, which measures volatility on the S&P 500. With bullish news from the Fed and a potential China trade deal agreed upon, volatility has been way down this past week.

The expected decrease in volatility can be seen in the options activity in VXX, where there was a very large purchase of December 27th puts. However, there was also a large purchase of February calls, which make money if volatility spikes in the next couple months. This could be a hedge against a stock portfolio or a speculative bet that volatility is going to increase early next year.

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