How traders scored big in $VIX

The CBOE Volatility Index soared as the market sold off today, yielding large returns on option positions.

Back on Nov. 2, Investitute co-founder Jon Najarian cited the purchase of 100,000 Weekly $15 calls expiring on Feb. 14 for $1.92 as part of a bullish spread. Those calls traded for $8.50 today, more than 4 times their purchase price.

Then, just last Friday, Investitute’s tracking systems found that 248,000 Weekly $15 calls expiring on March 21 were purchased for $1.83 as part of another bullish spread. Those calls traded for $6.40 today, 3.5 times their purchase price.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

VIX skyrocketed 115.6% to 37.32 today. The index, which does not have a dollar value, trades inversely to the S&P 500.