The entire Consumer Cyclical sector is killing right now. PG, CL, CLX and KMB are all at or near all-time high stock prices. The industry is doing great as a whole; KMB in particular has had a great run higher. Yet, something a little screwy is happening with Option IV in KMB. Take a look at the 30 day IV from LiveVolPro of CL, CLX, KMB, and PG. KMB is the green line:
Bloomberg asked me to talk commodities today. While not my strong point, I know enough about grains and oil to have a decent discussion with about anyone. However, today was easy. Here is why:
When I was on the train coming into work, I was thinking to myself that OVX and its sister CVF have both had a bit of a rally. I was going to talk about how expensive options were getting in WTI and in USO. Then I sat down and looked at the actual vols close up. For starters, USO IV is not that high.
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I have to admit, there are very few traders that are as excited as me that the CBOE is relaunching options and futures on GVZ and OVX. While I like VIX, I think it has some flaws to it that possibly make the product more difficult to use as a hedge: