The Option Pit VIX Traffic Light is Yellow: Volatility Is Likely To Move Wildly.

Hey Traders,

After hitting the 20-handle yesterday …

Today the VIX is back up nearly 2.5 points.

This is why the Option Pit VIX Traffic Light is yellow (indicating wild moves) and not red (indicating falling vol).

My suggestion?

Buckle up.

We could see huge moves like this for a few days …

Here is why.

Tomorrow we are looking ahead to two big potential catalysts …

Non-farms payrolls …

And Amazon (Ticker: AMZN) earnings (which technically take place tonight)

If you ask me, AMZN actually has the potential to be even bigger than nonfarms …

(Just take a look at how Meta (Ticker: FB) rocked the markets today.)

And in the pits, you can alrea

Here is the AMZN at-the-money (ATM) straddle yesterday at the close:

Here it is today:

Implied volatility (IV) is absolutely exploding in AMZN …

If AMZN delivers a less-than-outstanding report, and tanks tomorrow …

We could easily see the VIX shoot to 30.

However, if AMZN beats expectations, we could see the VIX under 20 in short order.

If we take a look at the VIX futures curve, it is really priced for a move in either direction right now …

Of course, for as much as I expect the AMZN news to rule the roost tomorrow …

Do not forget to keep an eye on nonfarms, as a big disappointment there could throw markets for a loop too …

Your Only Option,

Mark Sebastian