Tomorrow, I’m hosting a post election event: “The Expert’s Guide to Know The Exact Trading Plan You Need To End 2020.” The WHOLE team and I will be hosting the event along with two special guests that have some sweet insider intel for you to end 2020 strong! We’ll be talking everything from options, vol, and even insider regs that you can use to help bag some big returns.
Many of you know I co-host a podcast called ‘Volatility Views’ on the Option Insider Network.
Every week one of the segments is what the top open interest positions currently are on the VIX index.
Last week as we read the list of top positions, my jaw dropped…
Only 2 of the top 10 were call strikes.
This means that of the Top 10 open interest strikes, 8 of 10 were puts…
To put this in perspective, NORMALLY, it is the exact opposite in that index.
Typically 7 or 8 of the top 10 strikes are out of the money calls.
This is because VIX has always been a hedging instrument.
That has changed in the last 5 months, why?
Because the VIX is high.
Here’s something most don’t understand about the VIX:
The VIX works its best when it moves from the low teens to 50…
…not when it moves from 30 to 40.
Traders simply don’t get the bang for their buck.
Frankly, when the VIX is 35 I can hedge better using put spreads on SPX than any straight vol hedge.
Without the hedgers, the only players left in VIX are the mean reversion/volatility spike faders.
A few of them were out in force on Monday, notably the December 20 puts.
Also note that just like OI, only 2 of the top 10 trades were calls, and they appeared to be spread.
Clearly someone thinks VIX will be sub 20 by December…
Its a good seasonal bet, and a good mean reversion trade…
.23 cents is cheap too!!!
The VIX light is Green: Meaning there is likely to be high volatility over the next few days.
Your Only Option,
P.S. – I hope you all go out there and vote today! It is special and the world is watching!
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