I think vix at 16 is a gift. Way too much risk out there. I’be been closing most of my short risk premium positions.
The recent drop in volatility / VIX.
- Thread starter Laissez Faire
- Start date
I think the drop in volatility recently is a sign that the market is preparing to stabilize and eventually go into an uptrend once the inflation is under control (with entrenched shrinkflation I don't think inflation is ever going to be around the 2% target rate but eventually we will learn to cope). If you look at the periods before covid in 2019, the IV on SPX was extremely low and we were having the strongest bullish trend ever with Yellen even raising the interest rates until covid stopped the bullish trend right in its tracks and we have been having super high volatility ever since but now that covid is brought under control and the economy re-opening and inflation getting slightly better and the recession seems to be not in the air, I think we might be going back to the uptrend in 2019 and continuing where it left off unless we have something unexpected happening like another virus attack: https://www.cdc.gov/flu/avianflu/avian-flu-summary.htm this one with 50% death rate or with a worsening war situation in Ukraine or a new war in either North Korea or Iran, then we might have elevated volatility again.
That is fantastic!! That would help bring down our inflation in no time and with no recessions. Thank your beloved motherland for us for not importing from us and giving us less incentive to import from your motherland. Win Win!!
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FWIW I think the bear has further to run - maybe taking us to 3000 or so on SPX, eventually.
Vol has actually been elevated, historically speaking, going all the way back to 2018. Now 2011-2018, that was a real grind for day-trading ES.
Interesting chart, and adds credence to the theory that prices fall between May and September.
with vix being low. mr. market is gonna use the debt ceiling limit issue in congress as an excuse to give the vix some bounce. prepare to short the stonk market in the coming weeks. who is with me?
It is a simple math problem really. VIX is 30 days swings of SPX, since we are in a tight range for the last few weeks, I can see the VIX is moving much higher only if the trading range expands a little.
VIX is at histroical low here. I personally long contracts 50 cents VIX trades, with expectation of making 25-50 cents each contract.
VIX is at histroical low here. I personally long contracts 50 cents VIX trades, with expectation of making 25-50 cents each contract.