The VIX Curve is SUPER, SUPER FLAT

If you don’t know what a planking exercise looks like, here is a picture: Basically, the person exercising tries to make their body as flat as possible. So the VIX is, in fact, planking: From February through September there is almost NO difference in futures price. This is not unusual when we are in a…

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This Index Crushed It

Traders fail to recognize how NOT diversified the NDX (QQQ) and the SPX (SPY) are. The top 6 stocks in the NDX make up about 45% of the index. The SAME 6 stocks make up about 23% of the SPX. SO,  if you own the SPX and NDX,  you are ‘Texas Hedging’ On the floor…

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Size Up OTM VXX Call Spread Says WARNING

Yesterday was not a big deal. The key: We have seen much more volatility on rallies than we have on sell offs. I mean 25 points is not nearly what we moved on Thursday of last week. While that is a nice uptick from the movement the VIX was showing in the prior few weeks,  10…

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Twitter Controversy is good for Volatility

I have said multiple times:  politics do not matter… …except when they have a deep economic impact. Over the weekend Twitter permanently banned President Trump. Let me be clear…this is apolitical… Banning President Trump is a bad economic decision for Twitter. The president has millions upon millions of followers. These people are going to use…

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What!! How Did the Market Go Up??

Politics seem to be everywhere right now. The Capitol Building was stormed…. Democrats have swept both houses of congress…. President Trump has been banned from Twitter….. The S&P 500 rallied just under 2% this week. How is that possible with everything going on in Washington DC. The answer is simple: Only certain kinds of politics…

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The Option Pit VIX Traffic Light Goes Red

The VIX traffic light was dead on when it switched from Red to Yellow. “But Mark,  the VIX went up, and then down,  and is back where it started…how is this dead on?” You might ask. Remember,  a yellow light does NOT mean that the VIX is going higher. A yellow light means the VIX…

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Making Trading Sense of the Capital Being Stormed

Wednesday was a political event (and sad in that someone lost their life). However,  as the VIX was popping and markets were selling off,  I was not jumping on the long volatility bandwagon. I was shorting vol. In Little John I made the call to buy puts on UVXY. I also used that time to…

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Call Buyers are Back!

One of the big themes from the second half of 2020 was the absence of call buyers. Over the last 6 months,  puts have averaged more volume than calls.  Calls averaging about 200k contracts, and puts about 215k. But NOT Tuesday! Take a look at this: Remember,  as much as retail loves to set up…

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Surge in XLE Means A lot to the Future of Oil

Oil has been in a bear market for almost 3 years. Oil being down has KILLED the entire energy complex. XOM,  CVX…you name the oil company… …it has had a BAD few years. Tuesday’s oil surge saw stocks in XLE, the Energy Sector ETF,  take off. XOM up 5% CVX up 3% RIG up 13%…

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The Option Pit Traffic Light for VIX is Yellow

The Option Pit VIX traffic light has teetered on changing colors a couple of times over the last two weeks. The move on Monday was enough to trip it to yellow. Two main pieces of the indicator moved it. First the VIX went partially “backward.” No Im not talking about Marty McFly and back to…

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