XFA’s Bill Looney is seeing more traders making bets that a monster market move is coming.

Looney is making the observation from the market’s front lines, where he helps facilitate trades on behalf of large institutional clients.

“The theme is the investors are positioned on the tail side of the market,” he told CNBC’s “Trading Nation” on Thursday. “There is some out-of-the-money puts being bought, deep out-of-the-money puts as well as deep out-of-the-money calls, because they’re positioning for an explosive move either way.”

Looney, who runs global business development for the firm, calls it a fluid situation as traders and investors evaluate upcoming risks.

“There’s a lot of what we’d classify as known unknowns. You’ve got Brexit. You’ve got Super Tuesday. You’ve got earnings season coming up,” said Looney.

He classifies them as “known unknowns” over the next six to eight weeks that have the potential to drive stocks further into record territory or spark a sharp pullback.

“You can take a look at this type of environment and clearly sense that the long bias is afraid though of those big movement potentials,” he said. “It’ll be interesting to see if we actually get an event that causes a big move how the market allows that positioning to unwind.”

On Thursday, the Dow, S&P 500 and Nasdaq set all-time highs. The Dow closed less than 50 points away from the 29,000 milestone.

The Cboe Volatility Index, which measures market fear, is 37% lower than last year. According to Looney, the market is too focused on fundamentals and low interest rates to give fresh tensions with Iran a chunk of attention.

“If we step back for a second and take a look at the event on Thursday night, the airstrike, the volume in the options marketplace could be best described as muted,” Looney said. “If you actually look at it as compared to December, it barely ticked higher than the high level of the past 30 days.”

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