Market Breaks…And More

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Hey traders,

IBKR literally left hundreds of thousands of traders stranded at the open and then Robinhood had apparently its own outage too which left the market at anemic volumes. 

(NOTE for the future)

The VIX December options have 6 trading days left before they expire on Wednesday, the 16h.

Heading into December expiration market positioning is lining up for a full on dumping of volatility.

Open interest in December skews more heavily toward puts than I have seen in a long time.

Check out downside and ATM put open interest:

Between the $18 and 4$5 strikes there are 9 strikes that have more than 100,000 contracts open…

7 of the 9 strikes are in puts….

ALL of the strikes that have more than 200,000 contracts open are in puts as well.

I would note there is a TON of open contracts on the $20 strike in particular.

If the VIX DOES dip below 20 and push toward 19,  the activity of Market Makers pushing futures lower to hedge their positions could have a profound effect on the VIX this week.

IF we get a push lower,  the VIX could free fall.

This would also torch VXX and UVXY as well.

They KEY: Watch 20 on the VIX this week,  if it falls, the VIX will get smoked.

The VIX light is SCREAMING RED.

Your Only Option,

Mark Sebastian

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