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With the S&P 500 selling off by .8% and the NDX selling off a whopping 2.15% – the VIX had a nice pop on Wednesday.
The VIX futures rallied, pulling VXX and UVXY higher.
One would think this type of price action would bring the call hedgers out in force just in case there is follow through to today’s sell off.
Here is the issue: they did not show up…
Instead VIX faders showed up in relative force.
Check out the volumes in the December contract:
|NOTE: Activity was concentrated on the 20, 21, and 23 puts.|
This was likely driven by traders betting that the index is going to fade in the coming week.
There was also heavy trading in the Jan 21 puts.
My guess is that today is a bit of a one off…
…Puts outpaced call in VIX on a scale of greater than 1.5 to one, that is SIGNIFICANT fading of this move.
The VIX light is RED. We think the VIX is going to drop.
Your Only Option,
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