Last week, the combined dollar value of hedge positions on the S&P 500, NASDAQ 100 and Dow Jones Industrial indexes was $121.43 billion, not far from the August 16 peak of $160.02 billion.
Last week, large traders (50 or more contracts) bought nearly 5 million put options, spending $8.1 billion in premiums. Netting that against money spent on call premiums, larger traders spent net nearly $7 billion on put options last week. That amount is double the lowest readings we have seen over the last 22 years.
Another way to measure this activity is to consider the average premium paid for calls and puts. Last week large investors spent an average of $153 per call option. At the same time, they spent $1,638 per put option. Netting those premiums out, we can see the record-breaking demand for protection against a crash that was spent last week.
