VIX… Duh!

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On a day where VIX was nearly down 100 points at one point, I was interested in the VIX.
Why?
 Institutional traders have essentially abandoned hedging using volatility.

And so I wanted to see what the volume would look like in the VIX index options on such a day like yesterday.

But something surprised me so read on…

You see normally I would expect the volume of calls to exceed puts on a ratio of at least 7 to 1, maybe more.

Take a look at the volume of puts to calls:
image

Puts outpaced calls by 3 to 1.

Why?

The retail trader.

Unlike institutional traders, retail traders LOVE being short volatility.So on a day where the VIX exploded higher the options were playing the VIX to back off.

This volume, small and large traders, setting up trades like the retail public.

I cannot stress this enough: retail is currently a whale, be it equities or volatilities.

The VIX light is Green, meaning volatility is more likely to go up than down.

Your Only Option,

Mark Sebastian

P.S. – This is EXACTLY why I launched my newest service “Little John”. Retail is changing the landscape folks!! Watch me find a trade where retail IS THE WHALE and is poised to make a BIG move! 










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