"~USO (UBOCY: MAR'09 25.00 CALL) 13:50 (15,204 @$ 1.45) [BID: 1.45 ASK: 1.50 BIDSIZE: 5,092 ASKSIZE: 47] (atBID) VAL: $2,204,580"The value of the trade was $2.2 million and it looks like they hit the bid. I have no idea how the full trade was set up or if it was playing the long side (17k puts traded) but I'll show you what happened to the value of the calls and USO right after the transaction occurred. Here's part of the order book below.
Once all of these calls traded USO's volume spiked and it increased about 4.3%.
The calls also caught a bid increasing 35% (1.45 to 1.97) but without liquidity of course.
It's interesting that everything started at 1:50. Below I posted a long term chart of the USO. The trend is still down and it's up against heavy resistance. Tepid oil demand and bloated inventories could ruin this ETF so hedge. Contango and front month rolls have been ruining this security since monthly spreads were so wide. Big oil traders and institutions have been taking advantage of the spread by storing oil at spot and selling long dated futures to make easy dough (Oil stored at sea may top 80 mln bbls -Frontline). Recently however the front to second month futures curve is starting to narrow (Narrowing contango may spur U.S. oil stock selloff). Price is now in a tug of war between global growth and supply destruction.
