BY MARK SEBASTIAN
October 4, 2023
Hey Traders,
Check out the chop fest that took place on Monday.

The S&P 500 was up nearly 20 and was down nearly 30.
The rips and dips were quite quick as well.
This is a sign of an aimless market…one that can have a range greater than 1% and yet still end the day flat.
This is part of the reason VIX was so aimless. Yet, underneath if you watched volatility there were some wearing signs.
For the second time in a week, the VIX went partially backward, with the cash index trading above the front-month future.
Even though it didn’t close that way, the curve was still extremely flat…

We get a day of serious selling and we are likely to see the 1st 3 months go into backwardation.
VVIX remains high but not insane…a sign that traders are still buying both calls and puts.
It actually closed the day up…by 1.29 points to 95.39.
SPX remains in no man’s land hanging below the 50 and the 21 dma but above the 200 down at 4200.
Futures tried to break 4300 several times.
So where does this leave the market…in no man’s land, with high vol and expensive straddles?
Tomorrow, after that nice little rally we might open up…but we could fade easily.
I think the trade is to ignore SPX and look to the VIX….the index appears to be swelling…

Rally, drop, rally harder…drop…then potentially take off.
If you can buy some cheap October 17 puts and calls for $0.70-$0.90, one of those two could more than double.
Questions about that? Leave a comment below!
Your only option,
Mark Sebastian
Mark Sebastian
Founder & CEO, Option Pit
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