VOLQ, is the new QQQ Volatility index being disseminated by the NASDAQ market.
It uses At the Money options to determine its index price, not a large basket of options like the VIX.
With the move the NDX had today at the end of the day, I look at VOLQ and ask…is it too cheap:
VOLQ has been down a TON over the last few days.
It was down most of the day today as well, especally the last couple of minutes of trading when the NDX took a nosedive.
Given the run up in the NDX caused by the ‘stay at home’ trade, one has to wonder this:
What happens next for the NDX with that trade coming off?
Let me be clear FMAGA is going nowhere (FB, MSFT, AAPL, GOOGL/GOOG AMZN)
However, I think it could be due at a minimum for some undersized returns, and is more likely to see more selling.
I see a scenario where the Dow outperforms the NDX and the SPX. We see positive market breadth (more stocks up than down) BUT….
Maybe NDX is down…somewhat significantly.
Thus, I look at the uptick in VOLQ and ask, is it too cheap…
The answer is probably yes right here, I would want to own straddles in the QQQ.
The VIX light is RED meaning that we expect IV to drop in the next 30 days.
Your Only Option,
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