High noon draws $4M put spread buyer in SP100 Euro-style Index
High noon draws $4M put spread buyer in SP100 Euro-style Index. As the index traded near $1237.67 today a trader paid $5.10 for 7732 April 5th 1240/1250 put spreads to open a new position. Spread is currently several points in the money and the buyer appears to be making a simple even money bet that the market will be here or lower 11 days from now when these expire. If correct, the spread will expire into 7.73M, providing a return of 96% on the premium, but a 1% climb in the index would wipe out the entire value of the spread. XEO is a CBOE index listed in 2001 to compliment the SP100 American Style product, OEX, which had dominated index option trading for the 1990s. Today's flow echo's action from March 4th when two 15K lot $5 put spreads were bought to open, in the 50% or max value range.