How the investor called "VIX elephant" made millions in a couple of days

Just two days after the market's most notorious volatility bull extended his bullish wager on the Cboe Volatility Index (VIX) he's now returned to harvest the gains he made when stocks went berserk.
The profit-taking was a long time coming for the mysterious "VIX Elephant," who made a name for himself by stubbornly clinging to a wager the fear gauge would climb to levels not seen in the last couple years.

And while it's been a rocky road at times, the VIX Elephant returned to profitability when the index spiked 29% on Friday. Then, when it skyrocketed a record 84% on Monday, he made even more money — apparently enough to decide it was time to take some chips off the table.

Sold roughly 260,000 March $15 calls for $8.20, appearing to close a trade from Feb. 2 when 260,000 were bought for $1.83.

Bought roughly 260,000 March $25 calls for $4.90, appearing to close a portion of a trade from Feb. 2 when 521,200 were sold for 62 cents.

Bought roughly 260,000 March $12 puts for 30 cents, appearing to close a trade from Feb. 2 when 266,500 were sold for 76 cents.

As the VIX Elephant was absorbing losses in the months between September 2017 and February 2018, it was easy to wonder why he was so adamant about keeping his position intact.And just think — if he'd been shorting volatility instead, like so many unprepared investors, he would've taken a massive beating.

Source: Bloomberg Pro Terminal

Trader Bozhidar Arabadzhiev