The Option Pit VIX Light Is Red, and Volatility Is Likely to Drop.
Hey Traders,
We have a host of amazing traders here at Option Pit …
Among that group is veteran bond trader Bill Griffo and his Power Income letter.
Griff has been saying for months that there is a boatload of inflation heading our way.
And let’s think about the headlines we’re seeing all around today …
Driver shortages, staffing shortages at restaurants, and rising prices in food, lumber, housing, gas and metals …
You name it … and the price is rising!
This has me interested in SPDR Gold Trust (Ticker: GLD).
Gold has traditionally been a major store of wealth when inflation hits the U.S.
While it has yet to react so far, it appears that a breakout is starting form …
Now what really surprised me is where the CBOE Gold Volatility Index (Ticker: GVZ) is trading.
GVZ is the VIX index methodology on GLD options.
Take a look:
While GVZ is getting a bit of a pop today, the index is still really inexpensive.
This makes me want to buy calls — because the option prices are cheap.
June 170 calls, which are at the money, are glittering at just $3.20. And GLD is up about 2.50 as of this writing.
The Option Pit VIX Light Is Red, and Volatility Is Likely to Drop.
Your Only Option,
Mark Sebastian