The VIX Is Waiting For This To Happen

Mark Sebastian

The Option Pit VIX Traffic Light Is Yellow: Volatility Is Likely To Move.

Hey Traders,

The Option Pit VIX Traffic Light is yellow … but just barely.

The VIX futures curve is in contango …

But judging by the formation, it looks like short-term vol expectations are still rather high …

Not that you would be able to tell from the VIX of VIX … VVIX.

Even as the VIX itself stubbornly refuses to drop significantly, the VVIX is notching a long string of multi-year lows …

So while vol expectations may not be muted … vol of vol expectations are.

However … I would not expect to see the VIX plunge significantly before the latest Consumer Price Index (CPI) numbers are released.

Those numbers are due out this Friday … and it will give us a bigger hint as to what the Fed will do next, and how big of a rate-hike we should expect (or not expect) next.

Keep your eyes open, we are not out of the woods yet …

Your Only Option,

Mark Sebastian

VIX Edge

Mark Sebastian

Mark Sebastian is a former member of both the Chicago Board Options Exchange (CBOE) and the American Stock Exchange (AMEX), where he spent years mastering the art of options trading in the most competitive environment imaginable. As Chief Investment Officer at the hedge fund Karman Line Capital, Mark manages sophisticated options strategies for institutional clients. He is the author of two highly regarded books on options trading: ‘The Option Traders Hedge Fund’ and ‘Trading Options for Edge.’ Mark is a frequent guest on major financial networks including CNBC, Fox Business News, Bloomberg, and First Business News, where he provides expert commentary on market volatility and options strategies.

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