Huge put trades in S&P 500 pushes up fear gauge

CHICAGO, Oct 22 (Reuters) - Massive trades in the November S&P 500 put options on Wednesday may have driven the so-called VIX, Wall Street's fear gauge, to an inaccurate new record high near the open, several option participants said.

The Chicago Board Options Exchange Volatility Index .VIX opened at roughly 53, then immediately peaked to a new high of 81.45. The index rapidly pulled back toward the mid-60 reading within minutes.

A CBOE spokesman later confirmed the 81.45 reading was a bad print.

Option traders said this morning's expiration of October VIX options and futures may have played a role in the unusual behavior of the fear gauge, which still remains at lofty levels.

The VIX was up 12.95 percent to 59.99 in morning trade as U.S. stocks tumbled on concerns that the global economy is heading toward recession.

Huge blocks of deep out-of-the-money put option trades pegged to the Standard & Poor's 500 index .SPX traded near the open while the VIX moved higher. The strikes were in the new front month November contract, traders said.

"Since the VIX measures projected volatility of near-term S&P 500 option prices, the activity in those put options may have pushed up the VIX," said Frederic Ruffy, options strategist at New York-based Web site Whatstrading.com.

(Reporting by Doris Frankel, Editing by Chizu Nomiyama)