BY ANDREW GIOVINAZZI
December 21, 2023
Yo Pit Crazies,
Stocks dropped 1.5% in about 1 hr on Wednesday. That is the perfect opportunity to trade 0DTE options as long as you learn to do it correctly. Learn how to do that Friday with Mark and Licia.
I mentioned in the Pit Stop today that VIX going up and SPX going up at the same time is not normal behavior as it does that only 20% of the time on average. At some point the anti-correlation has to return to normal.
Anti-Correlation is:
That is VIX up, SPX Down
Or
VIX down and SPX up
When I said VIX is calling for a ball you want to hand it to the index. Just like the great MJ. The clock is ticking and I want to give the rock to the man that can do the job.
Would the VIX move today help with trading 0DTE options? Did VIX do the job?
The answer is …
Some signals are better than other signals, VIX is a good signal
VIX spent most of the day green and picked up more steam throughout the day. I tried to get a SPDR S&P 500 Trust ETF (Ticker: SPY) strangle in OP Mentoring midday only to have the market fall apart before I could execute it. I did get VIX Strangle/SPY calendar on for the Trading Desk early on and I should be able to close my VIX calls for nice money and ride the balance of the position when SPY turns around.
When VIX is rallying on SPY rally day, that is usually a good tell for buying SPY puts in the short term. Like 0DTE short term.
Join the Trading Desk and get the 0DTE course for free. Mark and I post daily Riff Trade ideas and they do quite well.
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
See what's hot at option pit
CAPITOL GAINS: SMR Aug16 7 call closed for a 150% gain
DELTA STRIKE: VLY Mar15 8 puts closed for a 88% gain
PFE May17 26 calls closed for a 66% win
OP MENTORING: SPY Mar22/19 510 put calendars and 520 calls for 6.4% gain
OPTION SHOPPER: ERX Mar28 65 calls closed for a 90% gain