Large Bearish Put Options Spread Possibly Placed

Twenty minutes after the opening bell on Thursday, an investor unwound a bearish spread in August options and entered a similar position in December options (WSJ article). Not really that newsworthy until you find out that the trade involved 720,000 options contracts on the SPDR Trust Series 1 (SPY), representing about half of the volume traded on the SPDR fund on a daily basis. As mentioned by the WSJ:

The investor who pulled the trigger on this trade appears to have set up a bearish "one-by-two put spread" in December options -- buying December $95 "puts," which convey the right to sell the fund, and selling twice as many December $82 puts.

Apparently someone else is also not too impressed with recent revenue and earnings numbers, or at least wants to protect recent gains. See the following links for more information on the bear put spread here, and bear ratio spreads, such as the one-by-two, here. It will be interesting to see how quickly the trades pays off, if at all. Microsoft certainly helped the bears after the bell Thursday.