Shortly after 1 pm ET on Wednesday, volume spiked in bullish call options on State Street’s popular SPDR S&P 500 ETF Trust, the index-tracking fund better known by its ticker SPY. The surge in activity took place in options that would pay off if SPY’s price rose above $509 that day. At 1:06 pm, for instance, an unknown buyer spent about $21,000 to purchase 101 of the contracts, according to derivatives-data firm SpotGamma.
At 1:10 p.m., SPY was trading at about $501—so it would have taken a jump of more than 1.5% for those options contracts to deliver a payday. The trades were in so-called zero-day-to-expiry options, meaning they would have expired worthless within a few hours if markets had dropped.