vxx

Can the VXX hold 26?

Posted by atg on Wed, 02/01/2012 - 5:29pm

Getting to a number in stocks and indexes is important: AAPL at $500 (oh sorry, not yet there, but are there doubts?), the Dow when it first crossed 10,000 (the second and third time not as fun), and the VIX below $20. When the VIX is below 20, the market is entering a lower volatility environment, and fund managers get to rejoice again as they try to beat the S&P 500 up. That is a far cry from the opportunities in the 4th quarter of 2011. The step sister of the VIX is the VXX ETN, which is made up of the front two VIX future months. We watch it pretty closely at Option Pit in Option Pit Live. It is a nice trading product. What I am waiting for is a close and drop below $26. Why you ask?

VXX closes below 28

Posted by atg on Mon, 01/23/2012 - 7:31pm

Did you catch our COO Mark Sebastian's mention on Mad Money. View the Video here. As a follow up, on February 15th, we will be presenting a webinar: Using Options To Trade Stock Earnings. Register here. One thing that can be said of the products related to volatility is that they make new lows more quietly than they make new highs. A new short term low goes by with a whisper. Also, the trend in the products does get to be a near one way train at the ends. Let review a few simple stats as the VXX last broke through $28, albeit in the other direction.

The Underrated Move by the ECB

Posted by atg on Fri, 01/20/2012 - 6:05pm

In my short stint as a floor clerk (Ronald Reagan just left the White House), I learned an early lesson in liquidity. One of the partners in the firm I worked for would use low liquidity as a partial definition of a Bear Market. Sitting on a trading floor, clerking for a trader who was watching the paint dry was a visceral experience. Watching every equity bid hit in the move up to Gulf War I (Dow around 2300), I could feel no one wanted to do anything. Usually, in a liquid market, there is action between the bid and offer. Not so for that stretch in 1990. No trader would give a floor broker a break filling paper because of the dread overhang of uncertainty with the Iraq invasion.

VIX Futures Not Exactly a Harbinger of Bad Things

Posted by acparis on Tue, 01/10/2012 - 8:36pm

We will be having the second free webinar in our using the VIX to trade series. Go to our EVENTS page to register. Also, make sure to read the Option Pit Challenge below: As I was looking at the VIX trading relative to the SPX, I was struck by a few things: 1. While the VIX really threatened to break 20, it never did. The VIX rallied toward the end of the day, which shows there are some buyers of insurance that are willing to step in and buy insurance with the VIX at 20.00

VIX Movement Normal, Curve in Good Shape

Posted by acparis on Tue, 01/03/2012 - 4:45pm

As I was giving the AM Vol Report today, many an option trader asked me about the price action of the VIX. Was the fact that the VIX was barely down but the SPX was up a huge sign of a market not 'buying into' a rally. Sometimes the answer is yes. I gave a great VIX webinar last month where I explained how I use VIX to help me trade S&P Futures, SPY, and other directional plays. However, today we are not looking at that situation at all, despite the ATM IV being flat: SPX 1275

Option Pit Top Blogs: Christmas and the VIX

Posted by acparis on Tue, 12/27/2011 - 4:53pm

Option Pit's After The Holidays Sale: Do you want some option training for yourself?

and the VXX Goes down

Posted by atg on Wed, 12/21/2011 - 7:54pm

The VXX gets smoked… and we told you so. For a while now we at Option Pit have been noticing the declines in the VIX even when the market has been falling on the vicious but brief selloffs of late. That is a sign of volatility fatigue in the broader market and some acceptance that things might be looking brighter for equity prices. With today as the last VIX settlement for 2011 I thought it was appropriate to mention the near collapse of the price in VXX (ETN that follows the two front month VIX futures) the end of the day. What the heck happened?

vxx