BY ANDREW GIOVINAZZI
July 1st, 2025
Yo Pit Crazies,
The BBB passed through the Senate and ended up spending even more than the House. If there’s a more ineffective group of individuals tasked with representing the American people, I’d like to know who they are. The BBB even caused stocks to react like this:
That’s right — we’re trading with a VIX near 17, and the S&P 500 barely budged, moving just 3.80 points or 0.06% on the day. The market took one look at the Senate’s latest concoction and responded with a collective “no thanks.” There was a real opportunity — and even a mandate — to rein in government spending back to 2020 levels, but Congress missed the mark completely. Sure, there are a few tax breaks and some vague 10-year gimmickry, but none of it was enough to spark any excitement among traders.
This is what traders are waiting for…
Long Term VIX Future Premiums are still juicy
The green stripe below indicates that traders are still bidding up VIX futures — likely in anticipation of potential news on Trump’s tariffs, especially now that the BBB has landed with a thud on Wall Street. Meanwhile, most volatility products holding VIX futures are sitting on a ton of potential decay.
The -1x Short VIX Futures ETF (Ticker: SVIX) might finally have a meaningful move this cycle. It currently holds a 50/50 short position in July and August VIX futures. I expect the fund to pop once we get past the final round of “Liberation Day: Part 2.
The White House has been racking up some recent wins, and it looks like they’re aiming to keep the momentum going. That likely spells trouble for the VIX — and upside for SVIX — by the end of next week.
To Your Trading Success,
AG
