Cue up the hyperanalysis, there’s some VIX OTM call trading going on……

The CBOE Volatility Index (.VIX) is down .28 to 20.88, as the S&P 500 (.SPX) has traded in a relatively narrow 10 point range Tuesday. The S&P 500 is nearly unchanged midday. In the options market, VIX July 42.5 calls are the day’s most actively traded contract, with more almost 87K traded. A lot of that volume is due to ratio spread trading, where a strategist was apparently bought 4 July 42 calls for every 1 (short) July 32.5 call. More than 25K July 32.5 calls have also traded today. They paid $1 per 1×4, according to a contact on the floor. The position is tied to VIX futures at 32.6 (might be a roll of long calls).

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