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“Mr. Valentine” Has Set the Price

Yo Pit Crazies,

 

It’s Christmas time and time for the greatest of Christmas trading movies … Trading Places.

 

 

Option Pit does not have a Billy Ray Valentine. (And I don’t recall any recent orange juice futures trades.)

 

But we do have our own ace VIX specialist, Mark Sebastian.

 

And he has set a price for VIX.

 

Jump on it.

 

The Key to Trading VIX Is Estimating How Low It Can Go

 

I have taken over Mark’s VIX Edge on Monday mornings to teach about a subject I know something about … trading volatility.

 

The key is estimating how low VIX can go and then working the expected theoretical value of the VIX futures.

 

Option Pro Volatility Dashboard

 

Mark is estimating a 16 VIX by end-of-year, and I don’t disagree.

 

I think a lot of the residual volatility is from the Omicron thing and that air is leaking out of the balloon.

 

Pfizer’s (Ticker: PFE) new COVID pill is not hurting either.

 

I am using the Edge Hunter Pro Vol sheet to estimate lows for the Barclays iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) and Pro Shares Trust Ultra VIX Short Term Futures ETF (UVXY) options.

LET THE HOLIDAYS BEGIN!  Merry Christmas to all!

 

The Rundown

 

Option Shopper

Licia Leslie puts on her best trading shoes to find option bargains using market making and charting experience. Generally debit options and spreads with low risk, high reward setups. Short hold times are the norm.

 

      • Licia is having a RIOT of time with Riot Blockchain Inc. (Ticker: RIOT) calls and likes crypto for a snap recovery.

 

Capitol Gains

Wall Street insider Frank Gregory and I run a portfolio approach to trading options with stocks that have good long-term prospects based on Frank’s K Street knowledge and my options expertise.

 

      • Regeneron Inc. (Ticker: REGN) is back on the radar screen after a big pullback.  

 

Other stocks currently in the CAPITOL GAINS portfolio:

 

      • Mandiant Inc. (Ticker: MNDT) long cybersecurity
      • SPDR Oil and Gas Explorers (Ticker: XOP) long oil
      • Cleveland Cliffs Resources (CLF)
      • Ford Motor Company (Ticker: F)

 

Power Income Trader:

Power Income Trader is a systematic approach to trading inflation. By pulling real-time data from the Fed, US Treasury and Gov't, Power Income Trader alerts users on changes in money flow driven by Fed policy. Bill's system puts you out in front of the most powerful money flow in the world.

 

Griff will be back after Christmas, but it’s not too late to get in on his 80% win rate.

 

Big Money Flow

Each week, Option Pit CEO Mark Sebastian looks at size institutional option buying with a twist.  He mostly buys calls or puts to ride the large momentum trades.

 

      • Coupang Inc. (Ticker: CPNG) is generating coupons of its own with just over 50% returns on the close this week.

 

Robinhood Trader:
Option Pit CEO Mark Sebastian uses the Robinhood Gamma Radar to find order flow in active MEME  names.

      • Mark added some Pro Shares Trust Ultra VIX Short Term Futures ETF (Ticker: UVXY) puts that are up a crisp 37%. He is closing half of them..

Pro Trading Room:
The Pro Room is Option Pit’s live access to Mark and myself during trading hours. Our Pro students post trade ideas with Mark and me during the entire trading session. 

 

The Pro Room was selling puts and put spreads on the slowdown into the holiday week.

 

 

Volatility Edge & Volatility Trading Club:

Volatility Edge is run by Mark and uses the proprietary Option Pit VIX Light indicator to guide volatility trading. The Vol Trade Club is run by me (AG), and employs a long strangle strategy that seeks to use Cboe Volatility Index (VIX) future decay to pay for upside iPath Series B S&P 500 short-term VIX futures ETN (VXX) and Pro Shares Trust Ultra VIX Short Term Futures ETF (UVXY) options.

The Option Pit VIX Light Is Moving And Still Yellow. Realized vol in SPX is still very high.

 

My VTC Trade No. 274 is up 10% on risk right now, but the puts are up 50% and I’m getting close to closing some.

 

Remember, a lot of vol strategies I use are market neutral. That means whether SPX or VIX go up or down, the positions still make money. This is a technique you can learn in the Volatility Trading Club and Volatility Edge!

 

To Your Trading Success,

 

AG

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