Jeff Gundlach is betting that markets will go crazy in the next 5 months

Brendan McDermid/Reuters

NEW YORK (Reuters) - Jeffrey Gundlach's DoubleLine Capital purchased some five-month put options on the Standard & Poor's 500 Index a couple days ago as the CBOE Volatility Index fell to its lowest since December 1993.

"We lost money the first day we put on the trade, but now we are doing great. This is like free money," Gundlach, who is known on Wall Street as the Bond King, said in a telephone interview on Thursday. "We are in a seasonally weak period for stocks but more importantly, we think the VIX was really, really low. So the S&P puts are going long volatility."

(Reporting By Jennifer Ablan; Editing by Jonathan Oatis)

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