The VIX People Should Be Talking About

Yes,  today there was a huge trade in the VIX pit.  It is only news because its a slow day.  While that is a big trade it is no where near the biggest that pit has seen and would essentially be a light sneeze in SPX.  To make matters more interesting, that is not the VIX index that is going to be leading.  Many traders are noting that the SPX has been the tail to the bond market's dog.  Well  the VIX is likely to head the same way.  We have seen increases in IV of FX and Oil affect the markets.  The OIV and EVZ vol indexes started to move well before the SPX and really before the underlyings took off.  

If we are going to see the big move in Bonds we are going to see the bond vix move first:  VXTYN,  if you are not familiar with index, its been mostly below 6 for a long time.  However, historically bond vol is closer to 8%-10% when the FED is not involved.  It will get there again as things normalize.


LivevolX (r)

If the market is going to move because of bonds VXTYN

The Lesson:

VXTYN is the VIX of the 10 year note.  it has futures that trade at CFE (CBOE Futures Exchange).

The Trade:

Bond vol is probably only going to go up from here.