BY ANDREW GIOVINAZZI

September 1, 2023

Yo Pit Crazies,

Mark and I introduced the Pro ATMs on Wednesday night. Our Pro ATMs are Areas of Trading Mastery for all those who did not attend.  Click to see the video here.

There’s one question I get every week that is essential to making profitable trades: “Why does this option have that price?” Well after trading millions of option contracts I usually have an answer for my students: There is always a reason. When I was a young trader my mentor told me if you cannot figure out the answer, you are asking the wrong question. There is always an answer for why an option is priced that way.

In the Trading Desk, we often discuss pricing in VIX options and we found a massive opportunity right now in VIX.

If you were there during the live show you had an opportunity to take advantage of the latest setup.

If you weren’t, just keep reading…

VIX pricing reflects the future, not the cash VIX price

Yesterday I said I was going to talk about Ipath S&P 500 VIX short-term futures ETN (Ticker: VXX) and here’s why: That product owns futures that usually rot every day just like decaying options. The higher they are the more they can rot, potentially. That is why we held VXX puts into this week for the Trading Desk.

The opportunity in VIX right now is that IV of VIX, VVIX is at year lows. It’s hard to believe with USGov downgraded that volatility in the VIX is at a year-low. So I started buying Oct VIX options.

This weekend, I will walk through the ones I bought and why. If you want to know exactly how the VIX works, try VIX Made Easy in our video library. In VIX Made Easy, you’ll find out exactly where to look for the best VIX options.

Or call (888) 872 3301 to join our Pro service, set an appointment with me to talk about your trading goals, and get plugged into the best trading community on earth.

To your trading success,

AG