Yesterday, we were watching stocks get a dose of TTS, or Trump Tweet Syndrome. What that is: every time the president puts out a tweet about what he’s going to do to China, stocks sell off, volatility goes up, and all traders head for the exits.

However, today’s dose of TTS was very light. Even with the VIX heading toward 20, we couldn’t see more downside than one percent today, as has been the case in the last couple of weeks. We really have not seen huge downturns with the massive spikes in the VIX index.

Not all stocks are getting smoked

Not all stocks were getting smoked. Oil stocks did well today. Most stocks that had good earnings did well. 

I do have a name for you: a stock that didn’t do much today but showed huge trading volume. 

Come check it out.

Order Flow and Option Price Increases

Now, stocks that have huge volume—you might say, “Andrew, what’s going on with the volume there? How do you know?” If you look at this chart below, you can see a big jump in implied volatility. That is just the price traders will pay for a period of time. If they don’t feel like paying a lot for a 30-day option, the premiums will be lower. If they feel like paying a lot for a 30-day option, they will spend more money for options. 

Volatility is just another way of saying, “How much will traders pay for options?” Right now, traders are paying lots and lots of dollars for options in this stock.

Note below traders bought 60,000 plus options of the Nov 21 $9 calls that are a full $1.5 out of the money. Sigma IV – the average volatility for the term – jumped by 17 points.