The Option Pit VIX Light Is Red, And Volatility Is Likely To Drop.
Hey Traders,
On Thursday the VIX closed at a new post-pandemic low!
Volatility got smoked on Thursday, shooting VIX to its lowest close since the beginning of COVID …
Recently I’ve been discussing a string of low VIX closes, and what it could mean for the markets going forward …
So the question is … will it continue?
I have the answer!
On Thursday the VIX closed at a new post-pandemic low of 16.10.
While VIX has technically dipped lower than this level since the beginning of the pandemic, it hasn’t closed this low yet …
We have seen the index hit new recent lows in the last three months …
Each time it led to some ugliness … short lived, yes, but ugly …
So, now the question is … are we heading lower or higher?
I have been saying for months the VIX will be at 15 or lower by July …
I’ll admit, I am wrong sometimes …
But this time?
I think I am right.
Big traders were buying puts AGAIN in July …
Check out the ballooning open interest and big volume in July puts:
Open interest on the July 17-strike puts is now over 250,000, with another 29,000 trading today!
The 16s have over 218,000 open!
Big money is looking for the VIX to fall.
The 15 puts cost $0.25, and there is open interest of nearly 100,000 …
I think we will get there.
I would be a buyer of the July 16-strike or 15-strike puts …
In addition, ProShares Ultra VIX Short Term Futures ETF (Ticker: UVXY) puts are extremely appealing…
Just today I closed the UVXY 34-strike puts for a huge profit for Volatility Edge …
A 75% win in the UVXY June 11 33-strike puts for Robinhood Trader …
And June 17-strike puts for Volatility Edge …
Each trade won big.
And I think if played right there is more to come …
Your Only Option,
Mark Sebastian