The Super Terrific Happy Hour

[Max E.]

I understand that--it's actually that interplay that got me looking at it as a long for hedges. The call ratio spread offsets the worst of the VIX future's natural decline, while giving me ok enough exposure.

I've also got a buddy who plays the VIX exclusively with long calls. Just buys the dips and waits. It actually seems like a pretty good strategy, if tying up money that could be better spent elsewhere. It's the old, if you wait long enough in a train station, a train will come past...

I don't have a clear way to hedge diagonal spreads, and the VIX seems to be the ticket. Bullish jumps (in stocks I have diagonals on) are reasonably hedged within the position itself and I just close the whole thing early for a loss. The bearish drops like today can hit the long side unnecessarily hard though...small moves in either direction are ideal for the diagonal. So, I'm ONLY concerned about large downside moves.

Admittedly when i look at most futures, im lost, when i look at most options im lost, so im not even going to say i under stand what these guys are doing on VIX calls, but if the VIX trades anything like UVXY, or TVIX, or VXX i will always believe the hard money is on the long side.

This is my opinion and it may be naeive but i honestly think we are witnessing the complete death of volatility. We are close to the end of an 8 year bull market so it might just be me getting pissed, but i honestly think that stocks and algos are so much better at catching up to market equilibrium now, that we wont ever see shit like the flash crash, or the 10% down/up days in the sandp during the housing bubble burst. Im honestly starting to sell myself on the idea that their is simply too much access to information now, and the market is almost always balanced, for anything crazy to happen again. Other than premarket, you hit these tiny pockets every now and then when the deck is stacked on high volume instruments, and it hits its level bounces then catches the top then fizzles, even look at facebook before the puke, 8 dollar range premarket turns into 3 once it opens, then the volume gets out of whack then it pukes and goes right back up


This could be insanely naieve on my part to say that, and it may just be the market has bored me to death but i see the ways algos catch all instruments now, and basically unless you are in premarket or the first hour of the day, or you are watching an instrument with an idea going in, it is almost impossible to make money mid day anymore the way you used to be able too.

Thats why i say VXX is going to zero.

 

[Max E.]

Note where the ES stopped tonight, the market isnt random guys, multi day charts, and knowing where you are trading is key. Im still looking to short this but liking it less and less, its really hard for the market to take out puke bottoms like yesterday because so many people are trapped right now.

My intuition says we go down for another day but im just observing here, want to see how it reacts at 2470 if it tests that level.

 

[Max E.]

K fuck this just shorted ES 2466.5, this one is not for the faint of heart guys, im giving it some room, hoping to add closer to 2470, the bet is that we dont crack 2475.

Be careful if shorting around that 2462.5 level im going to give that a couple tries but if it starts holding up ill be pretty quick to admit im wrong.

 

[Max E.]

added little more ES 2466

 

[Max E.]

Short four ES contracts now, theres a fine line between stubborness and ignorance, and im pretty sure EPIC trading is not included anywhere between those two. but im trying to thread the needle on this one., 2463 seems like its holding up but im kind of pissed at myself for missing this yesterday, and then missing the push through 2470 on the way down.

So im now short 4 contracts 2466.25

 

[Max E.]

Short 6 contracts now.

 

[Max E.]

I might be seeing shit, but it feels like its way easier to read supply/demand in the aftermarket/premarket, what im looking at on L2, every time ES pushes up, there is no one willing to hit the offer, that tells me no buyers, but it could be just another reason im selling myself on this, 6 contracts short now.

 

[Max E.]

dont like the volume bar i put a line too in the morning think its key to take out 2463.75

 

[Max E.]

Took 2 off here, im just paying for the trade, still not sure of this, i will add below 2462 though, but the thought process, i pulled 2 point out of 2 contracts, and i got to give 2 points to the other 4 contracts so i almost paid for it.

Im probably bitching out though.

i should be hammering the fuck out of it short here odds are very high we test the lows.

 

[Max E.]

2462.5 is a massive level this is a hero to zero calll my average is about 2467, ill probably scratch it there now, or else pile in below 2462.5


still got 4 short 2467. (Edit sorry my average is 2465.87) meant to put 2466, typo.