BY MARK SEBASTIAN
November 14, 2023
Hey Traders,
As you may have heard on Monday I entered my ‘double my money’ challenge on a single trade.
In this trade I am looking to turn 1000.00 dollars into two thousand dollars.
The opportunity here is clearly the VIX.
November futures expire on Wednesday…
Then December futures become the front month…
Looking at the curve I want you to hone in on the December future
It is trading 15.71, that is less than a point over the VIX cash. By all judgements…that is WAY too cheap…
Normally the December future should be trading around 1.5-2 points higher than the cash index.
That would put the VIX futures at about 16.25 or as high as 16.75….
Unless, the VIX is about to plummet.
If the VIX goes to 14, the curve is probably about right…
If VIX goes to 13, then the VIX futures have lots of room to drop….historically, VIX futures have been right and the cash index has been too high.
The trade I set up is a short play using a UVIX. There are reasons I used this ETF, my members know why.
What I can say is that if I am right, my play is going to be near double before the holidays.
Another confirming signal is VVIX…
It is trading at 84.22
If markets were looking for a pop, it might not be 100, but it would be over 90… That would signal that there is some demand for upside calls (the market thinking VIX futures will go higher)…there is apparently none of that right now.
The big takeaway is that it appears the market is planning on VIX falling to 13…
So to summarize:
- My key price action levels are: VIX below 14, VIX futures were right, and the VIX prior to CPI was wrong
- My key indicators are: VIX below 14, VVIX below 85
- My main trading vehicle is: UVIX
- My play is for members only but you can get in and if it doesn’t double… I’ll give you 6 months free of the service.
I have my play on…do you?
Questions about that? Leave a comment below!
Your Only Option,
Mark Sebastian
Mark Sebastian
Founder & CEO, Option Pit
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