As vol traders we tend to focus on what is in front of our face.
In the news is the US Elections.
Normally I ignore elections, they tend not to matter long term.
However, in this one there is a lot of opportunity built in.
The October VIX future is still 30!!!
The is over an 8 point premium to cash.
This is one of the widest spreads in real and percentage terms I have ever seen when the VIX is in contango.
Why? The election.
The VIX for October settles into the VIX that will exist right before US Elections.
What is interesting to me, is not so much October, but the months behind it.
Look at November and December futures.
They are also trading at MONSTER spreads.
There is real money to be made NOT betting on US elections…
…But betting one what the VIX will do well after the next president is already sworn in.
We will be creating some interesting trades in Nov, Dec, Jan and so on.
The VIX Light is Red
Your Only Option,