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We made a comment last week that put-call ratios were WAY out of whack in the VIX.
A product that normally has more calls than puts had seen the open interest flip.
Even more stunning, 8 of the top 10 open interest strikes were puts.
Since then, the VIX has backed off some, and November options have rolled off.
So what does the landscape look like in the VIX?
Still out of whack, just not as much as it used to be.
With all the heavy put buying average open interest has shifted to roughly equal calls and puts.
Average open interest is also down by a couple of million contracts (most of which would be calls).
So what does this tell me?
It tells me the market is still leaning short VIX, and thinking VIX is going to fall.
But there are fewer large bets on an immediate drop in VIX.
Those best mostly came off yesterday.
What does this mean going forward?
Until call OI(open interest) gets to about 1.3 or 1.5-to-1 relative to puts, there is going to be downside pressure on the VIX.
The VIX light is red, meaning the VIX is likely to drop in the coming weeks.
Your Only Option,
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