Yo Pit Crazies,

If you missed our Pro Areas of Trading Mastery on Wednesday night you can look right here for the video.  There are still 10 spots available out of 25 total so it has been very popular right now.  Join a community that trades with you.

Speaking of trading with you, many of my students jumped on an iPath S&P 500 VIX short-term futures (Ticker: VXX) trade on Friday.  What is happening in the vol markets as SPX makes a new run to 4500 is that implied volatility drops in the vol products to super-low levels.  No one thinks SPX is going to crack.

It has been well over a month since we last saw this.  (If you are in the ATM 4 OP Pro section you would understand what this means.)

It has YUGE implications for your trading whether you know it or not.

VIX future premiums are higher than normal

The green stripe above is how much more expensive VIX futures are than under normal or average historical conditions.  The market prices the front end of IV and then prices the back end of IV based on supply and demand.  The big green stripe means there is little short-term demand for options.  Seeing this pattern repeat over and over again helps me structure positions right.

We have a 3-day weekend so VIX marks down for holiday.  Options will be very cheap on Tuesday. Traders are not expecting much next week.  I tried to buy VXX puts and SPY puts today at the Trading Desk.  My students filled but I did not fill until the end of the day.  They all got better prices.  Sometimes that is how it goes in the land of mentoring.

To Your Trading Success,

AG