Click to View this Strategy in VXX Option Chain Profit Calculator
VXX Call Spread Nets 4% in Hours as Trade Targets a $2.9M Upside
A large options call spread in iPath Series B S&P 500 Vix Short-Term Futures ETN (VXX) caught attention after buyers netted a quick 4% gain as VXX shares surged. This trade shines a spotlight on shifting volatility sentiment, prompting traders to question: is the market bracing for a volatility spike?
Key Call Spread Trade: $282K Paid for a Potential $2.9M Return
| Details | Value |
|---|---|
| Expiration | 19-Sep-25 |
| Strike Prices | 50-80 Call Spread |
| Contracts | 2,120 |
| Days to Expiry | 49 |
| VWAP Trade Price | 2.66 |
| Stock Reference Price (at trade) | 45.46 |
| VWAP Bid/Ask | 2.13 / 2.79 |
| VWAP Spread Price (as of 2:55pm) | 2.77 |
| Stock Price (as of 2:55pm) | 46.41 |
Trade Insights: Buyers Seek Major Upside Amid Volatility Shift
The trade structure shows buyers paid approximately $282,000 (2,120 contracts x 100 shares/contract x $2.66), potentially positioning for up to $2.9 million in profits if VXX rises above $80 by the September 19, 2025 expiration. Within hours, the trade was up 4%—driven by VXX’s rally of $0.95 (from $45.46 to $46.41). For those watching option flows, this could indicate a bet on near-term turbulence, possibly as a hedge or speculation on increased market volatility.
Technical Indicators Show Bottom Bounce but Downtrend Persists
| Indicator | VXX Value | SPY Comparison |
|---|---|---|
| Stock Price | 46.41 | — |
| Percent Change Today | +9.30% | SPY: -1.6% |
| From 52-Week Low | +14.7% | — |
| From 52-Week High | -49.1% | — |
| 20-Day Avg | 44.58 | — |
| 50-Day Avg | 48.97 | — |
| 250-Day Avg | 50.71 | — |
| Versus 20-Day MA | +4.1% | — |
| Versus 50-Day MA | -5.2% | — |
| Versus 250-Day MA | -8.5% | — |
The 'Bottom Bounce' pattern in VXX shows a recovery off recent lows (+14.7% off the 52-week low), but the price remains well below long-term moving averages. Compared to SPY, VXX continues to underperform over most longer timeframes—down 86% over three years while SPY is up 56%. However, today’s pop (+9.3% vs SPY’s -1.6%) suggests a possible sentiment shift or short-term hedge demand. See table below for performance comparison:
| Duration | VXX Return | SPY Return |
|---|---|---|
| Today | +8.9% | -1.6% |
| 2 Weeks | +0.9% | -1.0% |
| 1 Month | -3.8% | +0.7% |
| 3 Months | -28.5% | +12.5% |
| 6 Months | +4.8% | +3.9% |
| 1 Year | 0.0% | +14.2% |
| YTD | +1.0% | +6.7% |
| 3 Years | -86.2% | +55.9% |
| 5 Years | -97.5% | +100.3% |
Option Skew Indicator Flashes Bullish
The 30-day implied volatility skew in VXX sits at a 90% rank—a level indicating the most bullish skew posture in almost a year. Historically, skew ranks above 80% signal option markets are either anticipating heightened volatility or preparing for major market moves. Such readings are uncommon and point to possible upward price movement, as options traders appear to be hedging for—or speculating on—surprises in volatility ahead.
Takeaway: Opportunity or Overexuberance?
With a high-volume call spread generating early profits and a strong bullish skew indicator, VXX traders seem to be bracing for bigger moves in volatility over the coming months. The bet on a move above $80 (a 72% rally from the current price) may look aggressive, but even moderate spikes could send the spread in the money. Given VXX’s long-term track record of declines, such bullish trades often reflect hedging, but today’s surge and option flows could also suggest more than routine portfolio insurance.
To further investigate VXX or discover other notable call spreads and multi-leg option trades, check out the Market Chameleon Multi-Leg Option Trade Screener.
Contact Information:
If you have feedback or concerns about the content, please feel free to reach out to us via email at support@marketchameleon.com.
About the Publisher - Marketchameleon.com:
Marketchameleon is a comprehensive financial research and analysis website specializing in stock and options markets. We leverage extensive data, models, and analytics to provide valuable insights into these markets. Our primary goal is to assist traders in identifying potential market developments and assessing potential risks and rewards.
NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
The information is provided for informational purposes only and should not be construed as investment advice. All stock price information is provided and transmitted as received from independent third-party data sources. The Information should only be used as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments and trading strategies. The Company does not guarantee the accuracy, completeness or timeliness of the Information.