Dear VIX traders,
While VIX trading has slowed, one thing is clear:
The Market is EXTREMELY nervous about what is in front of it.
I mentioned this last week: The Spread between VIX and the Sep Future is OUTLANDISHLY big.
The September future expires in 26 days.
This includes Labor Day Weekend.
Yet the September future is trading a full 4 point above the cash market:
Average volume is below 300,000 contracts a day (it normally is north of 500,000 closer to 600,000).
Open interest in the VIX options is down by 25% on the year.
Now is trading volume going to stay low forever?
No, it will return.
However, pay close attention…
…smart ‘paper’ buying calls in the VIX is far more conspicuous with volumes this low.
There have been some well times, long VIX call buys, keep an eye out for them as they could be a good tip off that the market is about to turn.
With AAPL and the other big 5 companies now completely disconnected,the VIX might be a good place to try to spot when the market finally corrects these valuations.
The VIX Traffic Light is Red.
Your Only Option,
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