Data released in a note by the firm on Thursday showed at least on paper that the unnamed trader could have made $27 million, according to Pravit Chintawongvanich, head of derivatives strategy at Macro Risk Advisors in New York.

The CBOE Volatility Index <.VIX>, better known as the VIX and the most widely followed barometer of expected near-term stock market volatility, closed up 4.94 points on Wednesday, its largest one-day jump since early September.

Wednesday's spike in the VIX made for big gains for "50 cent," who has been betting on a spike in volatility by repeatedly buying up VIX call options that cost about 50 cents.

VIX call options benefit from a jump in volatility and are used as a hedge against a stock market sell-off.

The S&P 500 Index <.SPX> notched its biggest one-day fall since Sept. 9 on Wednesday as investor hopes for tax cuts and other pro-business policies took a hit after reports that U.S. President Donald Trump tried to interfere with a federal investigation set off alarm bells on Wall Street.

However, just based on the position in VIX calls, the trader is far from in the black as persistently low stock market volatility over the last few months has made betting on increased stock market gyrations an expensive affair.

"If you look at their total profit and loss they are still down quite a bit," said Chintawongvanich, who estimates that even after Wednesday's gains the trader is still down about $90 million.

The Financial Times recently identified the trader as London-based investment manager Ruffer LLP, citing unnamed bankers. Ruffer declined to comment on the accuracy of the Financial Times story.

The trader, however, may not be looking to sell out of contracts at a profit just yet. Instead, depending on its hedging strategy, the trader could simply continue to buy VIX calls to benefit from a bigger spike in market volatility, Chintawongvanich said.

(Reporting by Saqib Iqbal Ahmed; Editing by Daniel Bases and Steve Orlofsky)

By Saqib Iqbal Ahmed