credit spread

SPX Heading Higher?

Submitted by msebastian on Thu, 08/16/2012 - 6:09pm

Generally speaking, I think my take on which direction the market has been heading is about as good as anyone else's(and by that, I mean worse than a monkey throwing darts).  However, there are times where I feel certain about my market inclination.  Right now, that inclination is up, and I will tell you why.  

One of the important factors that I follow is the price of the VIX relative to the SPX.  When the VIX is in decline, but not at a low, while at the same time the SPX is right at an all time high, my general belief is that the SPX is going to go higher.  We are in one of those scenarios right now.  Take a look:

spx_0.png

VIX and SPX not Moving In Sync

Submitted by msebastian on Tue, 04/17/2012 - 5:03pm

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While the SPX was up big today, traders may have reasons to fear continued turbulence in the markets, at least in the near term.  The main reason is the VIX.  While the VIX was down today, as many traders might expect, there is a problem with the amount the index was down.  It did not keep up with the SPX.  On a day the SPX is up 1.5%, the VIX should be down close to 10%.  The VIX was down about half that amount.

Traders May Want to SPX and VIX Premium Quick and Early

Submitted by msebastian on Tue, 06/21/2011 - 10:21pm

Today was an interesting day for the volatility complex.

Using Skew to Determine the Width of a Bull Credit Spread

Submitted by acparis on Mon, 04/11/2011 - 5:49pm

I had an interesting discussion with one of my option mentoring students today.  The student asked me how to determine how wide to set up credit spread.

Using Skew to Determine the Width of a Bull Credit Spread

Submitted by acparis on Mon, 04/11/2011 - 5:49pm

I had an interesting discussion with one of my option mentoring students today.  The student asked me how to determine how wide to set up credit spread.

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