What is going on with volatility

[der_kommissar]

• My educated guess is that the market is nervous due to being at an all time high.
• When the market is nervous volatility goes up.
• Fear is also rising.

This isn't really a new phenomenon...You can find this situation historically when the market starts "pricing in" a surge in volatility as the S&P rallies...Just look back to last December...final week of the year S&P jumped a bunch but VIX jumped even more...Same thing occurred in the final week of Oct 2015...Basically a "Vix divergence".

 

[ktm]

Most of the brexit polls have them staying in the EU, by a decent margin.

 

[Martinghoul]

I haven't been following any of the Brexit news until today lol. Any input on what you to expect to happen if they do exit?

Expect the unexpected... It,s anybody's guess what would happen if we vote "Leave"". Maybe nothing, who knows.

 

[tradelosses]

this is a f in' joke. SPX only off by 3 and VXV up 2.5% ... and up 7% since Tuesday morning. thank god I sold the strangle 2 weeks ago and not on Monday

If the breakfast is such a big concern, woudn't the market be falling hard now? Why the concern now instead of any other day

 

[newwurldmn]

this is a f in' joke. SPX only off by 3 and VXV up 2.5% ... and up 7% since Tuesday morning. thank god I sold the strangle 2 weeks ago and not on Monday

If the breakfast is such a big concern, woudn't the market be falling hard now? Why the concern now instead of any other day

Because vol is a cheaper hedge for a tail event than selling stock.

 

[Maverick74]

this is a f in' joke. SPX only off by 3 and VXV up 2.5% ... and up 7% since Tuesday morning. thank god I sold the strangle 2 weeks ago and not on Monday

If the breakfast is such a big concern, woudn't the market be falling hard now? Why the concern now instead of any other day

The VIX is at 14 give or take. At historically low levels. I would hardly say the VIX is pricing in such a big concern. LOL.

 

[OptionGuru]

• Low volume on the markets today.
• When buyers step in DOW, DIA and the QQQ's are going to go nuts to the upside. Sooner than later.
  
• Lots of Fear recently and that means Rising Markets.

 

[ironchef]

• Lots of Fear recently and that means Rising Markets.

I thought the opposite was true. High vol (lots of fear) means market drops?

 

[JackRab]

VIX is hardly up, I wouldn't say all-time low but definitely not expensive. European Vols are up 25-30% from end May... All are in the 20's.

So VIX would be a cheap hedge...

 

[JackRab]

Also bad for people who are short VIX futures hedged by short S&P .

Just curious, how many short ES contracts do you trade per VIX to hedge? If your VIX exposure is say 10k on VIX at 30, you short 2 x ES?

VIX doubling = ES -5%?