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From the article below, how can someone be certain all these trades were performed by the same entity?

To fund it, the investor sold approximately 260,000 VIX puts expiring in January with a strike price of 12.

The trader then used those proceeds to buy a VIX 1x2 call spread, which involves buying 260,000 VIX January calls with a strike price of 15 and selling 520,000 VIX January calls with a strike price of 25.

https://www.businessinsider.com/mystery-trader-rolls-over-massive-vix-stock-market-bet-into-january-2017-12

  • When you execute an options trade that has multiple legs such as a bull call spread, it can be done in one trade. This trade is logged for the market to see. If I’m not mistaken ToS has this ability on their analysis tool where you can see intraday timesales of trades in which it will specify if it’s a spread. – NuWin Sep 25 '18 at 6:09
  • @NuWin - You don't need software that identifies that a trade was placed as a spread. Large trades will be reflected in time and sales as well as Open Interest. Legs of 260k and 520k contracts are kind of hard to hide. – Bob Baerker Sep 25 '18 at 12:30
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The volume in the legs involved in this combo will stand out like a sore thumb when you look at the option chain. Even if the spreads were put on piecemeal on different days, the magnitude of the position would stand out in the Open Interest.

If trades of 260k, 260k and 520k contracts showed up at the same time on Time and Sales then it would have to be the same entity. If say 10k/10k and 20k trades appeared throughout the day or over the course over several days, the media could not be sure that it was the same entity, though the broker, the option exchange(s), SEC and the OCC would be privy to it.

FWIW, that's a trader with a set of cohones. There is not only open ended loss to the upside above 35 but a spike to that level will inflate implied volatility dramatically and with 2:1 short calls, that will wreak havoc on the margin required. Deep pockets!

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