implied volatility

The Interest Rate Boogie with the Homebuilders

We are finishing a volatile week for global markets and it most likely will stay that way until the ECB comes up with some announcement on Jan 22nd and/or the Greeks decide to elect a new government by the end of the month.  Earnings reports so far have been mediocre and without the promise of domestic QE, stocks have not been able to recover.  Short term things will stay choppy.

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The sell off lacks VIX

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2015 is starting off as the year of many swings.  For all the big daily moves in 2015, equities have not really gotten anywhere.  The post-FOMC rallies are fueled by the notion of lower rates and we run.  Then the sad realization of why we need lower rates hits and we sell off.  The only think I can say for this year is that the swings are solid and VIX is off the basement floor.

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My favorite blog of 2014- one of mine of course

As we come to the end of the year I thought I would put out my favorite blog of 2014.  It was a lesson on the weekend effect and how traders roll dates forward to pre-load time decay through the holiday.  As we are coming into the double barrel of Christmas and New Year I thought this would be helpful.  The short answer is selling options on Christmas Eve will not yield the dough one might think.

Realized vol is still high enough that selling short term options could get you in a heap of worry if the Santa Clause rally holds up.

Sometimes options are too cheap to sell.

From Jan 17th, 2014

The Day the IV stopped

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The walk of living dead stocks

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Ahead of the ECB meeting tomorrow and the NFP numbers, stocks have taken a quiet turn to the upside.  VIX is back in the 12 handle which is surprising for the type of announcements coming out and their potential for market moving news like we have seen in the past year.  What has made headline news is the slide in oil prices and the destruction of all the E&P companies as the USA is upsetting the world apple cart for oil.

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Buy the rumor and sell the BABA

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Stocks are struggling today to make it to another record for the S&P 500.  As of right now a little push at the end of the day should do it.  Without anything news worthy I don’t expect stocks to do a whole lot.  A stock that has been doing a lot is BABA.

Alibaba Group Holdings, BABA has been on a tear since mid-October as it held up better than just about everything else with the stuff hit the fan not too long ago.  Chinese equities have done ok since then but nothing like BABA. Yesterday was the big Singles Day retail extravaganza and BABA pulled in more of their share.

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Something is bubbling under the drillers

Stocks looked ok today until Spain announced they have a case of Ebola in the country. It sounds like a non sequitur but a panic could be bad for mining, airlines and a host of other industries that operate in Africa and transport goods and people.  Never mind that Ebola does not transfer from one person to another easily, but we are talking market sentiment here not rational behavior. 

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Someone see the Camel that puked on the Euro

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Normally I would not do this.  At Option Pit we pride ourselves on coming up with our own trading ideas so this is a bit of an aberration.  Sure we use client ideas, but heck, they are our clients.  This is one that came up in our Pro Chat and it led to a decent trade idea so I am going to share.

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Mean Reversion Day

“Unlock The Secrets Of The Mysterious VIX…

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VIX Realized Vol about as Low As It Gets

I spent a little time looking at VIX vol today.  I have to say, it is about as low as it gets...but could go even lower.  Take a look at how much HV has plumpted in VIX over the last few weeks.  But, taking a look at 30 DAY HV,  it is possible things could get worse.

Chart - ^VIX - CBOE Volatility Index_window_screenshot_4.png

LivevolX (r) www.livevol.com

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Is there a second take in TTWO?

Stocks are going to make a closing high today or near it as I write this post and I can’t help but think we would be way higher if Vladimir Putin could make up his mind what he wants to do in the Ukraine.  We know what he wants to do, take a bunch of territory, but the Europeans are still threatening sanctions.  That is keeping the VIX into another elevated close and vol. futures bid.

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