VIX finished the week on an all-time closing low level. However, despite the dramatic drop last week, only the November VIX future was lower while the rest of the contracts were higher for the week. It may be that traders are expecting the low volatility environment to be coming to an end.
On Wednesday, a trader took a stance that VIX is going to remain at low levels, but higher than the recently very low readings. With VIX around 9.90 and the November future trading at 11.15 someone sold 6,100 VIX Nov 10.50 Puts for 0.37 and 6,100 VIX Nov 12.50 Calls for 0.46 taking in a credit of 0.83. This trade will not be around past the morning of November 15 when standard VIX futures and options go off the board.
Note the November VIX contract is solidly in an area where the trader behind this short strangle hopes standard November VIX futures and options settle. The spot VIX on the other hand is near the price where our trader may begin to be concerned about the outcome of this trade. Since spot and the futures usually converge leading up to expiration, our trader would prefer spot VIX moves up to meet the future and not the other way around.