Market Conditions are for a long, hot Summer

BY ANDREW GIOVINAZZI

June 24, 2024

Yo Pit Crazies,

If you want to learn to trade options from real traders in person, come to the Summer OP Event in Chicago at the CBOE building in July.

Now truth be told, I never traded one contract in the new Cboe building or on the tiny new trading floor in the old CBOT building. Funny enough, two old floors with one I did trade on are taken over by Peak 6 trading and CRT. Both were smaller firms or did not exist when I started trading but they are big players now.

Time moves on and things I don’t think can happen can happen. Like how long will a bull run last? Sometimes folks get more obsessed about picking a top than making money $ in the meantime. Making money in the meantime means understanding conditions and riding those conditions. Something Peak 6 and CRT are pretty good at doing.

Speaking of good at doing, Mark and Licia have found a way to kick up 0 DTE results. You can check that out here.

SPX 1 year chart with realized vols at the bottom

Right now we have conditions that look like the chart above.

What are you going to do about it?

Realized Volatility is at 1 year lows

Stocks are trending up strongly so the days are bringing shorter moves but the weeks are bringing longer moves. Mostly because stocks are going straight up. That brings down the realized volatility, the close to close action, but leaves indexes much higher at the end of the week. A volatile market might have huge ranges everyday but by the end of the week, indexes are in the same spot.

I am trying out some longer term long call index options with more OTM hedges in VIX. That should allow me to take advantage of the conditions we have now. I expect Mark will be doing the same thing in the 0DTE product riding the daily trends,

To Your Trading Success,

-AG