Massive VXX implosion is possible today

Quote from Nine_Ender:

I'm very familiar with options; basically an increased VIX would indicate option sellers want more premium to make up for the increased risk of rapid one way movements in the market.

The source of confusion for me is Shortie continually relates higher VIX levels with rapidly falling markets. While that might be the case most of the time, I always thought it worked in both directions. Why would call sellers want to sell cheaply if the possibility of a sudden market rise was heightened ?
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Ur gonna have to looked up how the VIX is calculated to answer your question.


This is how the VIX behaves:


Market goes down, VIX goes up.

Market goes up, VIX goes down.


Market spikes down, VIX spikes up.

Market spikes up, VIX spikes down.
 
Quote from SteveNYC:

Ur gonna have to looked up how the VIX is calculated to answer your question.


This is how the VIX behaves:


Market goes down, VIX goes up.

Market goes up, VIX goes down.


Market spikes down, VIX spikes up.

Market spikes up, VIX spikes down.
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VIX/VXX apparently are useless to me. So I learned something today.
 
Quote from Nine_Ender:

VIX/VXX apparently are useless to me. So I learned something today.
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Have seen bottoms/temporary bottoms formed when VIX was around 40-50.

I believe VIX once reached 80 at some point in the 2008-09 sell off.

It doesn't seem to be reliable at picking tops however. Maybe b/c it measures fear and not greed.

The VIX bottoms out around 15 and stays around there no matter how long the market goes up. The market could go up for 3 months but the VIX stays around 15.

Haven't seen it go to 10 or below. I think 14 was the lowest I have ever seen it go to.

So, you could sell or sell short when the VIX reaches 15 but the market could continue to go up higher and higher....
 
Quote from SteveNYC:

Have seen bottoms/temporary bottoms formed when VIX was around 40-50.

I believe VIX once reached 80 at some point in the 2008-09 sell off.

It doesn't seem to be reliable at picking tops however. Maybe b/c it measures fear and not greed.

The VIX bottoms out around 15 and stays around there no matter how long the market goes up. The market could go up for 3 months but the VIX stays around 15.

Haven't seen it go to 10 or below. I think 14 was the lowest I have ever seen it go to.

So, you could sell or sell short when the VIX reaches 15 but the market could continue to go up higher and higher....
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I think the VIX could spike once again, I think the SPX will make a bottom under 1100, I still think sub 1000 on the SPX is a really possibility.

Short the VIX above 50 go long below 18!

Waiting patiently for TVIX to drop back below $25 before getting long.
 
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