The New Guy
Usually when a new trader enters a floor trading crowd, the current locals are none too happy. The problem is there is another mouth to feed, more competition, and/or now someone is standing in my spot. Local traders have a unique set of problems when facing new blood. As a 15 year former floor member, I broke into several crowds and even ran one. The transition was never easy (lots of hazing, and you needed to haze back to survive). Fortunately, for new traders in the virtual world of Option Pit, they are greeted with a little more excitement. As a matter of fact, I got a really warm welcome.
When I first started talking to Mark Sebastian about a year ago, I thought he was creating the right environment to teach people how to trade options by focusing on the fundamentals of how options trade. Wow what a wild thought! The same methods taught to professional floor traders can translate over into the retail space to build a sound basis for assembling positions based on current market conditions. My new role at Option Pit, Chief Strategy Officer, is to grow and expand the eco system Mark created by providing more of the tools, ideas, and strategies that 15 years of floor trading have taught me. While no “pit” is easy to break into, I think I have a good shot at this one. You will be seeing and hearing more from me in the weeks and months to come.
Why did the VIX do what it did?
This is one of those times where I thought I made a lock of a bet. Which would last longer the Greek Bailout Plan or Kim Kardashian’s current nuptials? I thought for sure the Bailout Plan would make it past 70+ days. The Bailout lasted a week. After all, the stakes were higher- world economic salvation and the Euro and Western Civilization. The Greek politicians took a great deal and tried to squeeze their saviors one more time. That was a really bad idea. Down went the market and up went the VIX. The midday decline in the VIX was not followed by the SPX, as the S&P 500 closed on its lows for the day. To me that is an inkling of all is not lost. There is the possibility of an announcement that maybe the January referendum was a mistake, but for now there is no denying the VIX is a barometer for the success coming out Brussels. If the Greeks actually admit the referendum idea is a mistake, today could be the high point in the November VIX contract from here until expiration. If the world has to wait until January, expect, like the travails of the Kardashian’s, more of the same that you saw today.
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