Eurodollar/Treasury Option Roundup, Put Tree Sale/OTC Hedge

Option volume improved Wednesday -- accts gradually migrating off the sidelines as risk appetite improved (stocks surged, SPX eminis +122.0 in late trade, Gold -57.0, WTI crude -14.0) and implied vols shifted lower.

• Continuing put skew buy theme: Eurodollar options hosted more put tree sales (net long vol package) with over 120,000 Dec 97.00/97.50/98.00 put trees sold from 1.5-2.0 (one-leg over) since last Friday.
• Shifting to nearer Sep expiry, paper sold -30,000 Sep 97.12/97.62/98.37 put trees, 13.5 1-leg over.
• Trading desk chatter the put tree sales are a hedge vs. a large OTC trade where risk becomes untenable around 3% -- thus the buying of the two lower strikes funded by the one-leg sale.
• Salient Treasury options trade: buy of +35,000 TYJ 130 calls mostly 11 -- adding to some +75k on the prior session at 18.
  
• Highlight 5Y trade: 20,000 FVJ 117.25/118 put spds, 24.5-25 after 30k Blocked/traded Monday at 14.5. In call, Block sale of -15,000 FVK 118 calls, 29 ref: 117-19.25