Options Trading and Education Blog

Option Pit Idea of the Week: SQ

Posted By Mark Sebastian Fri, 11/17/2017 - 1:40pm

Morning Vol Report 11.17.2017 Can VIX hold up?

Posted By Andrew Giovinazzi Fri, 11/17/2017 - 9:24am



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The VIX made Easy Webinar

Posted By Mark Sebastian Thu, 11/16/2017 - 9:49pm

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2017-11-16 VIX Made Easy Intro from Mark Sebastian on Vimeo.

Option Pit Vol Report 11-16-17

Posted By Mark Sebastian Thu, 11/16/2017 - 9:24am

Mark Sebastian's Hit on $SQ on Bloomberg TV

Posted By Mark Sebastian Wed, 11/15/2017 - 7:49pm

Watch it HERE

VIX is moving again

Posted By Andrew Giovinazzi Wed, 11/15/2017 - 4:06pm

Sign up for our free VIX class here

Just in time for our VIX webinar and the big vol index moved for us.  It is like we ordered it to drum up some excitement for the class.  Either way we have a sub 10 to 14.5 range for VIX in a little over a week.  The SPX has dropped a little over 1% in that time for the high tick of 2593.  The funny thing it has taken 6 days to get here.  Realized vol for the last 10 days is…..3.22 percent.


LivevolX for Lightspeed

Most of the weekly VIX futures went backward and far below what I think is fair value for the cycle.  For now there is not massive buy in from the VIX future traders.  Even so VIX up over multiple days is not to be ignored.  The VIX Dec future for 13.25 is not much of a premium.  I think over all lots of call spreads in VIX look cheap so I came up with a bonus pair trade with GE.  GE is so crushed it is hard to believe it can go down more so it would make a good way to finance some VIX call spreads.

The trade

Buy VIX Dec call spreads AND sell GE weekly just OTM put spreads.  There should be enough iterations to make some dollars.  Use a sliver of the money you make and buy our VIX course that way you will  know what I mean by “cheap” call spreads.

Take our Easy VIX webinar for free on Thursday.  It will make you approach VIX differently and shed some light on a few things   Click here

Disclosure:  Positions in VIX in the fund I manage risk for Karman Line Capital. 



Option Pit Vol Report 11-15-2017

Posted By Mark Sebastian Wed, 11/15/2017 - 10:06am

Option Pit Vol Report 11-14-17 VIX Rising

Posted By Mark Sebastian Tue, 11/14/2017 - 9:30am

How do I trade this VIX?

Posted By Andrew Giovinazzi Mon, 11/13/2017 - 3:51pm

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.

We are stuck in what I call Zone 1 which is the meandering path of VIX from 9 to 13. It is tough to get out of Zone 1.  VIX futures grind away everyday so the cost for long VIX buyers is pretty high.  One can spend a lot of money on VIX call spreads and not get very far in Zone 1.  Why?  Mostly because VIX options trade off of the futures and not the VIX cash.  It like a product with a different underlying every week so duration selection is crazy important.  Zone 1 trades a bit differently than, say, Zone 2.  The nature of VIX changes per Zone.

LivevolX for Lightspeed

We are now in what I call a “normal” volatility market.  If anything we are light on seasonal VIX Dec premium which makes VIX hedging cheaper for the cycle.  The little lift in IV last week could make short term Iron Condors in the SPX or RUT a bit more interesting with a VIX hedge.  Buy the cheap thing, sell the expensive thing.

The Trade

Take our Easy VIX webinar for free on Thursday.  It will make you approach VIX differently and shed some light on a few thingsClick here

Disclosure: VIX positions in the fund I manage risk for, Karman Line Capital, LLC.

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Option Pit Vol Report 11-13-17

Posted By Mark Sebastian Mon, 11/13/2017 - 9:29am