Yo Pit Crazies,

Spot Gamma goes live on Thursday. Grab your seat today. 

Also for all you OP Mentoring students, you can get a month of the Pro Chat Room for $300! If you can’t get a good trade to make the $300, let me know and I will give you a month of another OP product for free.

I was in the OP Mentoring class today and I was talking to my students about the difference between investing and trading. My big point was trading options, I don’t want to take delivery of the underlying and when investing I do. As I write this, the real difference is time. When Investing time does not matter. Until you need dough of course and timing helps but long term investing is about compounding returns and adding funds regularly.

Trading options is trading time. That is what I learned early some 30 years ago when I started floor trading. And time is volatility or vice versa. So the liquidity provider is telling me, or I used to tell you, what time is worth.

30 day VIX chart with 1 min candles

One of my old mentors from way back said, “You can pick the position, if I can pick the price.”

What did he mean?

The Price I pay for a position matters

Trading options that is.  An investor can pay a ridiculous price and wait it out, but an option trader runs out of time. That was what my G1 partner was telling me. We are in the time pricing business. Currently, the market is just about to reprice 30 day volatility to Middle East trouble lows. This cycle never saw Zone 4 VIX so while it was rocky, it has not been terrible yet. The Middle East mess is terrible, market vol not so much.

A lot of Fintwit is moaning about VIX dropping without SPX rallying. Volatility can move when stocks do not. Remember traders are pricing time. When VIX9D< VIX, traders are comfortable with less volatile movement in the short term so they expect the daily candles to get smaller.

If you want more Candlestick Magic, check out our Candlestick Queen Licia Leslie. Also  Griff will hit on Gamma in his SPOT GAMMA extravaganza. 

I will work the gamma volatility angle tomorrow. 

I expect VIX9D to trade at the recent lows going into the weekend. It was funny after the FOMC remarks that it could not quite get below VIX. Traders are almost ready to let the air out of the short term volatility balloon.

Remember I’m covering this live in X room – and you can too but even if you don’t join me you should see enough value in that vix9d to make your own play… If you don’t see it respond to the email in just sent you with subject line “what?” And I’ll break it down for you?

To Your Trading Success,

AG