Normally Speaking
The Option Pit VIX Light Is Red, and Volatility Is Likely to Go Down. Hey Traders, On Thursday, the VIX closed below 17 for the first time since the pandemic began. Interestingly, it was also one of the busiest days for the VIX options that I have seen in some time. […]
Smokin’
The Option Pit VIX Light Is Red, and Volatility Is Going to Drop. Hey Traders, The VIX actually got down to 16.87 on Wednesday and closed at a pandemic-era low of 17.16. That’s five-straight days below 20 for the VIX. Now traders — especially those who try to use technical analysis — are asking, with […]
The Weekend Effect … Effect
Hey Traders, As a VIX trader, you have to be aware of the weekend effect. It’s a phenomenon caused by the fact that the option pricing model assumes constant deca, but … we only trade five days a week. And last week, thanks to a holiday, we traded just four days. Let me explain… Heading […]
New VIX Regime Means New Opportunities
The Option Pit VIX Light Is Red, and Volatility Is Going to Drop. Hey Traders, With the VIX at 17, we are in a new volatility regime. Here is the crazy thing… … a HUGE number of the traders out there have never traded in a lower volatility market. Think about it … The giant […]
Signals Point to This
The Option Pit VIX Traffic Light Is Red, and Volatility Is Likely to Fall. Hey Traders, The VIX hit a peak of about 21.5 on Tuesday … But my positioning didn’t change. If anything, I went further short volatility. Why? The VIX curve. As the market (notably the […]
What’s Next for the VIX (and You)
The Option Pit VIX Light Is RED, and volatility is likely to drop. Hey Traders, On Monday … the S&P 500 dropped 3 points, yet the VIX shot up. On Tuesday … the S&P 500 dropped 12 points, and the VIX was down big. What gives? As I explained yesterday, the culprit is the Russell […]
What’s Causing This VIX Rally?
Hey Traders, On a day when the S&P 500 was down just 3.45 points — less than .1% — we saw the VIX make a really big move higher. Yes, we might account a little of it to coming off a weekend … Remember VIX undergoes a “weekend effect” that causes it to rise a […]
More upside
The Option Pit VIX Light Is Red, and Volatility Is Likely to Drop. Hey Traders, As you may know, I hosted a live trading event yesterday. Attendees were able to watch me trade for 90 minutes, from the opening bell on. And I covered a lot. Observing a professional trader in the live environment is […]
How Does My VIX Traffic Light Work
The Option Pit VIX Light is RED, and Volatility Is Likely to Drop. Hey Traders, Every day at the top of this letter, I reference the Option Pit VIX Light. It’s a proprietary tool that I’ve developed over 20 years as a trader to help guide my trading strategy And I have walked through them […]
Russell 2000 Cup Spilleth Over
The VIX Light Is RED, and Volatility Will Drop Hey Traders, The Russell 2000 Index (Ticker: RUT) had an UGLY day on Tuesday, closing down 3.35%. That dumpster fire lit up the rest of the indexes, most of which had been up on the day until things really got bad. You see, for the most […]