If you don’t know what a planking exercise looks like, here is a picture:
Basically, the person exercising tries to make their body as flat as possible.
So the VIX is, in fact, planking:
From February through September there is almost NO difference in futures price.
This is not unusual when we are in a backwardation (near-dated futures are more expensive than long-dated futures).
But it is rare when there is a full 2-point premium between the first month and the second month out.
I see a TON of opportunity in this curve …
And a short futures spread is likely to win.
Based on the curve, I want to sell April and buy May.
I also think, based on the curve, that February is a huge short.
In the free trade I put out to clients that emailed me back saying ‘SHOOT” we have seen a nice easy winner…
Even with the crazy moves, it’s up a quarter.
I think February is going to fall.
Like planking, it is EXTREMELY difficult for futures to fight gravity (the VIX cash in this case).
I would be a buyer of the Feb 23-20 put spread for about 1.30. I am pretty certain that is going to pay out nicely.
The VIX Light is Red … and that tells me this is likely to win.
Your Only Option,
Mark Sebastian
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