BY MARK SEBASTIAN
December 5, 2023
Hey Traders,
The VIX is sitting at 13 and has been plus or minus .50 of 13 for over a week.
You might read traders telling you that it is oversold.
Well…it might be…
But volatility can be oversold for a VERY VERY long time.
VIX has now been below 14 since November 17th, over 2 weeks, it’s been into the 12s and does not seem to want to break 13.5 right now.
On Monday…coming off a weekend, VIX could barely stay green despite the S&P 500 falling more than 1% at the lows…
This chart is 2014…
We hit a high over 20 in February and then had a couple of small bumps through April…Then the VIX just dropped…and it stayed low for MONTHS. From April 17th through August 1st, VIX never closed about 15.
If you were playing for the VIX spike you would have gotten destroyed…That is not to say there isn’t a way to approach this type of environment…
Believe it or not this can be an extremely profitable period to trade AND be hedged.
The key is how you do it…
- You need to take advantage of the VIX staying low and trade it to stay low.
- You need to have a viable hedge on at all times…but one that costs less than you are making on betting that the VIX will stay low.
I have discussed how to take advantage of the low VIX several times in this blog….but on Wednesday I am going to be revealing exactly how to trade this type of market.
Andrew and I are going to walk through a strategy that takes advantage of a low VIX to produce consistent returns AND carries a hedge that, in the event of a major market event…something I think we all can agree will happen (ahem … Gamma Bomb), this approach cleans up.
I have laid out the clues above of how you can construct this strategy, but we will lay it out in detail tomorrow.
You do not want to miss it. Click here to join me.
Questions about that? Leave a comment below!
Your Only Option,
Mark Sebastian
Mark Sebastian
Founder & CEO, Option Pit
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