^VIX at a 52 week lowwww!!!!!!
- Thread starter S2007S
- Start date
No no no. The underlying goes circular as it goes through zero to wrap back around to 100 again (but on a different scale).
This is because absolute zero volatility itself is considered 100% volatile since brokers and marker makers can't get commissions or vig on zero volume. That by definition is "100% volatile" and again, by definition, VIX can only increase asymptotically toward 100% in a mysterious singularity by forming two complex conjugates as it tends toward and through +/- zero. In this scenario the words of Al Gore come true in that "what was up is down and what was down is up". Just make sure to pay the extra premium for the option to convert puts to calls and calls to puts and you will be fine. It's not publicly traded yet but I am working with CBOE on sponsoring a new class of option.
TS
p.s. kidding of course...
Congrats longs we are the best$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
This has to be like the 50th time in the last 6 years.
Write this real simple formula down:
When the VIX >= 20, take long positions on equities
When the VIX <= 10, take short positions on equities
Write this real simple formula down:
When the VIX >= 20, take long positions on equities
When the VIX <= 10, take short positions on equities
If we have another down day like today this week, the VIX will be pushing 15 again.
That would be a near 50% gain in less than 7 trading days for any of you derivatives speculators. Amazing.
That would be a near 50% gain in less than 7 trading days for any of you derivatives speculators. Amazing.
I am still quite bullish. I think we are seeing institutional reshuffling and tax loss taking as well as foreign money profit taking on dollar weakness. There is still tremendous value in SPX and it is highly over sold having just penetrated its 20 day moving average. Let's see how it closes and if it rallies back over the next few days.
This is a fun time to trade and put on option debit/credit spreads.
TS
For now at least through the first half of 2007. I think the dollar's decline is going to really give the FED a lot of better options and will bolster exports. M&A could get a boost as well from global private equity.
TS