Here’s the trade that made $400 million on last week’s volatility spike

As a temporary panic gripped stock market investors during last week’s selloff, one trader turned a loss into almost $400 million in profit, thanks to a tiny series of bets on a volatility spike.

The trader is known as ‘50 Cent’—not to be confused with the accidental bitcoin millionaire and rapper—and got his name from buying small options for the Cboe Volatility Index, or VIX VIX, -5.85% for as little as half a dollar, hoping that the low volatility environment that had persisted until the beginning of this month would turn, according to reports by the Financial Times and Business Insider.

And did it ever turn.

The VIX, which uses options on the S&P 500 SPX, -0.51% to calculate expected volatility over the coming 30 days, spiked to its highest level since the Brexitreferendum in June 2016, recording its largest percentage change in history, last week amid a global equity selloff.

Source: MarketWatch

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