SPX Credit Spread Trader

[jeffm]

Edited and forgot to re-attach...

 

[Crucis]

I'm trying to get a handle on VIX movement. So far this summer, when the market goes up, VIX goes down and vice versa. Is this normal for VIX? I've been using it to follow volatility. Is this a proper use for VIX?

 

[ryank]

Quote from Crucis:

I'm trying to get a handle on VIX movement. So far this summer, when the market goes up, VIX goes down and vice versa. Is this normal for VIX? I've been using it to follow volatility. Is this a proper use for VIX?

That's the way I use it, as a gauge for market volatility. Drops in the market tend to instill fear in traders so VIX goes up, the opposite tends to happen as the market rises.

 

[Crucis]

Quote from ryank:

That's the way I use it, as a gauge for market volatility. Drops in the market tend to instill fear in traders so VIX goes up, the opposite tends to happen as the market rises.

Would we ever see the market go up and the VIX also go up?

 

[Cache Landing]

Quote from Crucis:

Would we ever see the market go up and the VIX also go up?

Generally, no. There are occassional days when this happens, but it isn't ever a prolonged event. Usually just lasts for a day or two.

 

[jeffm]

I always think about the quote from one of the 20's era market "greats". JP Morgan perhaps? I don't recall.

"I don't mind volatility. Its down that I don't like"

 

[Crucis]

Cache, ryank, thanks for the info. Sometimes you just have to double check your assumptions.

Cru

 

[ryank]

Quote from Sailing:

Pretty Quiet out here today.... that's usually a custom ET signal to go SHORT the SPX. Oops... forgot, coach hasn't placed his call hedge yet.

M~

Nice quiet day in the market to let a little theta do its work .

 

[dagnyt]

Quote from Cache Landing:

Generally, no. There are occassional days when this happens, but it isn't ever a prolonged event. Usually just lasts for a day or two.

In the 1970s and 1980s (I specifically remember April 1978 and Aug 1984) a market surge always resulted in a huge spike in option prices. In more recent years, only market declines caused spikes in IV.

Mark

 

[arbtrader]

Quote from jeffm:

diagtentpole.pdf

that is damn sexy

looks like the quintuple diag from a little while ago but with fewer transaction costs

you give up a portion of the peaks in exchange for propping up the middle