There’s a VIX for That

Hey Traders,

 

This afternoon, I’m doing a live event with Option Pit’s Head Income Trader Bill Griffo, a brilliant bond trader and someone I am absolutely stoked to have working with me.

 

During the presentation, we’re going to be talking about Oil and Gold (which, somewhat surprisingly, is not the name of a 1980s yacht rock duo).

 

Now, Bill is old school. He’s from a bond desk with a 40-year track record, not a former option market maker like me.

 

But today he has some great option trades that he will be giving away for free starting at 1 p.m.! (If you want them, here’s the direct-access event link.)

 

So what gives?

 

Well, Bill also analyzes commodity and gold volatilities … using their VIX indexes.

 

Success on the Charts

The Chicago Board Options Exchange (Cboe) pushes out north of 100 VIX indexes, from currency to ETFs to individual names.

 

You don’t need crazy professional analytics to be able to make smart volatility decisions.

 

The Gold volatility index symbol is GVZ, and in the chart below it is at a six-month low … 

 

 

Now, when Griff and I present our GLD trade idea this afternoon (at 1 p.m. EST, you should definitely come), what type of approach are we going to use?

 

Are we going to sell a credit spread or buy premium?

 

You’ll have to tune in to find out!

 

Let’s take a look at another index, OVX, the United States Oil Fund (Ticker: USO) VIX.

 

Oil is approaching year highs and vol usually rallies with oil (because hedgers like airlines are worried about the price rallying).

 

Yet OVX is at six-month lows.

 

Again, what type of approach do you think Bill and I are going to use?

 

You can only find out when you join us today — here’s the event link one more time!

 

The Option Pit VIX Light is Red: Short volatility is likely to win.

 

Your Only Option,

Mark Sebastian

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