​Daily Wrap – Market Plays RAD Options; Hybrids Target QE End

The sellside is pushing hybrid options to U.S. investors that play volatility arising from the end of QE next year. Obviously, U.S. investors are ripe for the trades thanks to 2013’s taper tantrum, which saw the rapid rise of U.S. treasury yields following mere comments from Bernanke. With the ECB’s Draghi hinting at a possible extension to QE recently, maybe those options may become just that harder to price? In single stocks, a market participant executed the day’s largest trade, selling more than 65,000 calls of drug chain Rite Aid, after reports the company is an acquisition target of Walgreens Boots Alliance.