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August 26, 2022
VIX Curve Expansion
The Option Pit VIX Traffic Light Is Red: Volatility is likely to decline. Hey Traders, Today, Federal Reserve chairman Jerome Powell speaks in Jackson Hole, Wy. Ahead of the speech, the August 26 PM SPX straddle is pricing in a move over 50 points! The IV for today is about 30%. That is high considering…
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August 25, 2022
What is the VIX curve doing?
The Option Pit VIX Traffic Light Is Red: Volatility is likely to decline. Hey Traders, We have talked in detail about how the VIX curve is out of whack. While the front month (September) futures have fallen in line, the back end of the curve is entirely too premium-rich. Notice September is only trading at…
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August 24, 2022
VIX Is Moving Up
The Option Pit VIX Traffic Light Is Red: Volatility is likely to decline. Hey Traders, The VIX closed up 0.31 points on Tuesday. The S&P 500 (Ticker: SPX) lost a touch over nine points. Yet the front month’s future actually fell. The rest of the curve … not so much: The green curve is Friday’s…
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August 23, 2022
Here Is The Latest VIX News
The Option Pit VIX Traffic Light Is Red: Volatility is likely to decline. SPX dropped more than 2% on Monday. The VIX closed the day with a huge rally, running over 24 for most of the day before finally settling at 23.80. But what a difference a day makes. Here was the curve on Friday:…
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August 22, 2022
Let’s Get Paid
Hey Traders, On Friday, the VIX closed up 1.04 to 20.60. Despite the giant gap between futures and the VIX, VIX futures movement was robust with the September future actually rallying MORE than the VIX: This means the spread between the futures and the cash actually widened on Friday… The spread now stands at 3.60…
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August 17, 2022
Longterm Hedging Is A Vibe
The Option Pit VIX Traffic Light Is Red: Volatility is likely to decline. Hey Traders, As we head toward VIX expiration, the VIX settled below 20 for the third day in a row. We also saw a huge uptick in VIX options volume. The volume has two trends – the same trends we have been…
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August 16, 2022
Here’s What Will Push VIX Lower
The Option Pit VIX Traffic Light Is Red: Volatility is likely to decline. Hey Traders, The VIX closed below 20 for the third day in a row at 19.69. Heading into expiration, the VIX is in a massive and steep contango. This is a sign the market is still not in love with this market.…
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August 15, 2022
Here Is The Latest VIX News
The Option Pit VIX Traffic Light Is Red: Volatility is likely to decline. Hey Traders, The VIX has a real shot at 18. It closed at 19.53 on Friday, ending its streak of above-20 prints. That said, not everything is as it seems with Friday’s price action. There were two things that I don’t like…
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August 12, 2022
Close Eye On VIX
The Option Pit VIX Traffic Light Is Red: Volatility is likely to decline. Hey Traders, On Thursday, the S&P 500 (Ticker: SPX) was up big … until it was not. Throughout the day though, the VIX was bid. You’ll recall I warned you this might happen. What is important is that the SPX closed above…
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August 11, 2022
Here Is What Will Push VIX Lower (And How To Trade It)
The Option Pit VIX Traffic Light Is Red: Volatility is likely to decline. Hey Traders, Consumer Price Index (CPI) and Producer Price Index (PPI) are out, and the market likes what it sees. VIX got smoked on Wednesday. That said, VIX seems to want to hover around 20 and not go lower: After a huge…
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