Andrew Giovinazzi's blog
Besides the Weekly options, the VIX is the best new product in a long time since the SPX. It spawned a whole other class of ETF’s and made all the old time Cboe seat holders a few extra bucks. The Bitcoin future and options will be out soon which might outshine them all. But really I want to talk VIX today.
2600 looms large. We discussed some trade ideas in our Gold Lab today and as much as I love some downside put spreads I can‘t help but think 2600 is soon. As we roll into the close VIX could not hold the 10 handle and the VIX futures could barely keep their tiny gains. Maybe 2600 by Friday since rallying is really all we do.
With all noise on taxes the slide in GE is quietly going under the rug. Just last week I wrote here it would be more sensible to price GE at $20 on a reduced dividend. GE is cratering on a downgrade now of all things before the big dividend cut. Downgrade it at $35, but at $20? Many don’t think the yield can hold at the near 5% level. If it does get cut, we should see lower prices.
I love these VIX Tweets with the big headlines, “Vol can’t get any lower.” I paraphrase the great Warren Buffett and say “VIX can probably stay lower longer that you call afford to keep buying VIX call spreads.” Everyone who writes for financial blogs wants to call the bottom in VIX. I can see it now, “I called the bottom so I know what I am talking about.” What really matters is what type of position we attach to the market call and what kind of position has “edge”. To be successful it is a combination of both. We find ourselves in what I call is a “hanging future”