VIX Hit Sub-13

Mark Sebastian

The Option Pit VIX Traffic Light Is Red: Volatility is likely to slide.

Hey Traders,

The S&P 500 closed up 16 points on Thursday, breaking a 3 day losing streak.

The VIX, however, did not break its losing streak.

In fact, the VIX closed at its lowest point since January 2020, before COVID.

So what does this mean?

In big terms, the age of COVID markets is over – the market is back on the bull.

We could see the market continue to move higher for an extended period of time.

The market is probably going higher. Yes, we are going to have a Gamma Bomb at some point, but that will be a blip in this move higher.

So what do you do as a trader?

With the VIX in the 12s, it’s now super cheap to buy options. If done strategically, this can make you a lot of money.

VIX is going to pull down option prices across every stock in the S&P 500 index. But at any given time, there will be stocks moving.

Invariably the options will be too cheap. Find these stocks and buy strangles.

Right now, that might be the Invesco QQQ Trust (Ticker: QQQ):

QQQ options are too cheap …

Questions about that? Leave a comment below!

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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