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Huge trade bets on floor in S&P 500

Chris McKhann (chris.mckhann@optionmonster.com)

As the S&P 500 slipped Friday from its all-time highs of the previous session, short-term traders were betting that any further losses would be limited.

optionMONSTER systems show that the April 1425 puts were the most active SPX Weekly options, the contracts that expire in two weeks. A trader sold more than 10,000 of those puts for the bid price of $0.40 in volume that was 6 times the strike's open interest before the session began, clearly showing that this is a new position.

The put seller apparently believes that the SPX will hold above 1425 through expiration at the close of April 19. The SPX is a cash-settled index, so if it below that strike at the expiration, the trader must pay the difference. (See our Education section)

The SPX finished the day at 1588.85, down 4.52 points. It hasn't been below 1425 since the last day of 2012, and the delta of 0.01 suggests just a 1 percent probability that the index will return to that level at expiration.

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