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Call buyers are targeting VXX at lows

Chris McKhann (chris.mckhann@optionmonster.com)

At big option trade in the iPath S&P 500 VIX Short-Term Futures Note is looking for another jump in volatility.

More than 250,000 VXX options have already traded, twice its daily average over the last month. optionMONSTER systems show that a trader bought 13,298 August 26 calls for the ask price of $0.24 in volume that was 6 times the strike's previous open interest, clearly indicating new activity.

Recently our scanners have detected selling in VXX calls, but today's trade is looking for a big move higher in the CBOE Volatility Index and its futures in coming weeks. The VXX exchange-traded note is composed of the two nearest-dated VIX futures, which are higher than the spot volatility index, as usual. (See our Education section)

The VXX is down 3.62 percent to $18.37 in early afternoon trading. The stock is at its lowest level since May 28 and is not far from its all-time low of $17.97 set the week before that. 

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