Watching Credit Spreads During QE2, LQD Has 30,000 March 2011 $100 Puts Open, Thoughts?

I'm watching bonds and credit spreads during QE2 week. LQD, the investment grade corporate bond ETF, just pierced through a rising wedge and is trading right under the 50DMA. It is not volatile. Elliott Wave's Bob Prechter just released a report on bonds titled "The Next Major Disaster Developing for Bond Holders" (link). Take from it what you will. With the Fed propping up Treasuries to lower rates, it is kind of hard to figure out how to price "risk" at the moment as the "risk-free" rate (Treasuries) is being manipulated. We'll see if traders drift away from Treasuries and use another credit instrument to price risk at some point. Also, why are 33,659 LQD $100 March 2011 Puts open? I don't see much interest anywhere else. I see they were bought in September (see thoughts by OptionMonster on the trade). This trade is the option to sell 3,365,900 shares at $100 if LQD is in the money (below $100 + premium). Interesting hedge. See charts > >

LQD Investment Grade Corporate Bond ETF (since 2002) -

Any thoughts on dividend yields? The S&P is testing the 50 month moving average again.

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