Yo, Pit Crazies,

As I looked at VIX options while teaching my Pro Platinum class yesterday, I tried to think of a time when those options were cheaper (at least for VIX being near 24).

The fact is, I could not.

The reason why they are so cheap is a surprise …

It took me a second to figure out why.

VIX Is Down 15 Days In A Row

That is a record.

Now you may say, “Andrew, VIX is down 15 days in a row, it has to go back up.”

And that would be right … except paper is not buying VIX options on the upside in any real shape or form.

The VIX 25/35 call spread is $1.60 and the 23 puts in Dec. 21 cycle are $1.05. That is incredibly cheap for the potential downside in VIX.

And that is the issue.

Realized vol in SPX is 24% on average for the past two months.  That is a very high and consistent orbit since the Fed pulled the rug out from under pivot believers.

The only way this VIX makes it below 20 is some change in the narrative.

The CPI has to surprise on the downside for VIX to break.  That could happen Thursday.  If the CPI comes in hot, just expect another 100-point down move in SPX and tepid VIX response.

That is why VIX IV is so low: funny enough, it  has nowhere to go.

The election might provide a catalyst, too, as long as we can figure out who won.

The Rundown

Power Income Trader

Bill took some quick gains in the metals with a win in the Silver Trust ETF (Ticker: SLV) Dec. 16/Nov. 18 19 call calendar and Dec. 16 19 calls closed for a 28% gain.

He also brought home profits with the Market Vectors Gold Miners ETF (Ticker: GDX) Nov. 18 23/25 call verticals closed for a 35% gain

To Your Trading Success,

AG