opiton trading

SPY ATM Vol hits 7.5% 2 weeks out, Holy Guacamole Batman!

So yes you say IV is low but the realized vol is lower.  20 day realized vol is only 6.02% as the SPY and big brother the SPX extend the 80+ day run without a close to close 1% down move.  At this point the market is loving the DJT administration, tweets aside.  Straight up rallies are hard to diagnose but it appears that the steady mantra ofearnings, less regulation, lower taxes and more infrastructure is having quite a bubbly effect that the buy algos find quite tantalizing.

 

Blog Image: 

VIX closes below the 200 day MA and the sky did not fall

Look for our volatility webinar this Nov 7th

Normally I don’t put much stock in 200 day MA but for the first day in a while things seemed to have to settled down.  VIX cash darn near broke through 16% before any earnings of consequence came out.  ATM volatility is down to below 13% in the Oct serial cycle.  Last week it was 18%.  The term structure for the VIX futures is back into a normal contango and the volatility productslost their daily gain status.

Blog Image: 

AAPL declares earnings and the market adjusts

Sign up for our Time Spread class here

As I write this Greece defaults on debt to the IMF and sends its citizens into some uncharted waters.  The SPY is up .25 from the close so it is a safe bet for now that US stocks don’t care anymore.  The game is ending and is about to play out with a referendum this weekend.  It would not surprise me to see stocks start a rally again and end up at new highs after the labor reports this week.  Another surprise was the jump in AAPL IV on a down volatility day in the market.

Blog Image: 

AMZN volatility is cheap

Seeing news reports on TWTR about AMZN using couriers to deliver packages gave me the UBER kind of feeling.  UBER is on its way to becoming one of the highest valued pre-IPO companies on the planet and it makes some sense AMZN is taking a page from its playbook.  That got me looking to AMZN volatility and it is very cheap.

Blog Image: 

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.

Blog Image: 
Subscribe to opiton trading