BY MARK SEBASTIAN
December 12, 2023
Hey Traders,
On Monday the VIX closed at multi-year lows…in the FACE of the CPI report.
Post CPI VIX is falling even more, the Index is now at levels we have not seen since January of 2020
Before you go saying…I should buy premium, remember prior to covid…VIX was DEAD…
It was in the 11-13 range pretty consistently with only a few spikes higher between 2014 and 2020 … .all of those spikes tended to last only a few weeks.
In general, the trade that paid with the VIX low…was short volatility.
Because when the VIX is low…it does tend to stay there until something changes its inertia.
Right now…the VIX curve is saying…the VIX could stay low for a while.
December futures are pricing the VIX like it is going into the 11st and January futures are set up to fade any move above 13…and with good reason…movement has died in the last month:
Check out S&P 500 realized volatility:
In the last 10 trading days movement is UP to 7%, in the last 20 days it is below 8.50…VIX from this perspective is actually quite expensive.
So, the trade is to be short volatility? Yes…but you have to do it smart.
To find out how to do this, Join me and Andrew tonight at 7pm.
You do not want to miss it. Click here to join me.
Questions about that? Leave a comment below!
Your Only Option,
Mark Sebastian
Mark Sebastian
Founder & CEO, Option Pit
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