Check Out Nasdaq!

Hey traders!

VOLQ, is the new QQQ Volatility index being disseminated by the NASDAQ market.

It uses At the Money options to determine its index price, not a large basket of options like the VIX.

With the move the NDX had today at the end of the day,  I look at VOLQ and ask…is it too cheap:

VOLQ has been down a TON over the last few days.

It was down most of the day today as well,  especally the last couple of minutes of trading when the NDX took a nosedive.

Given the run up in the NDX caused by the ‘stay at home’ trade,  one has to wonder this:

What happens next for the NDX with that trade coming off?

Let me be clear FMAGA is going nowhere (FB,  MSFT, AAPL,  GOOGL/GOOG AMZN)

However,  I think it could be due at a minimum for some undersized returns, and is more likely to see more selling.

I see a scenario where the Dow outperforms the NDX and the SPX.  We see positive market breadth (more stocks up than down)  BUT….

Maybe NDX is down…somewhat significantly.

Thus,  I look at the uptick in VOLQ and ask,  is it too cheap…

The answer is probably yes right here,  I would want to own straddles in the QQQ.

The VIX light is RED meaning that we expect IV to drop in the next 30 days.

Your Only Option,

Mark Sebastian

P.S. – Our premier vol trading service called “Volatility Edge,” just notched up another 200% gain trade and in the last month closed trades are up over 480%. To celebrate I’m reopening a few slots with our yearly special. Check it out and join here

  • DISCLAIMER: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. The materials presented from Option Pit LLC are for your informational and educational purposes only. Neither Option Pit LLC nor its employees do not offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational and educational purposes intended is at the user’s own risk. 
  • Option Pit LLC is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented materials. Option Pit LLC IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER. Specific trading ideas or strategies discussed in the presentations or materials are entirely illustrative and do not constitute a solicitation of a transaction (or transactions) or a recommendation to execute a particular transaction or implement a particular trading strategy.
  • To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Use caution when entering any option transaction and it is recommended you consult with your financial advisor for investment, legal or tax advice relating to options transactions.

Leave A Response

* Denotes Required Field