$FXI overnight volatility moves higher

$FXI overnight volatility moves higher

 

A new NAFTA deal appears in the offing so what does that have to do with the price of  volatility in Chinese equities?  I think plenty.  If you note from the chart below Chinese equities with $FXI as a proxy have had a rough sled of late.  US Equities are trading all time highs as just the hint of a trade deal percolate through the Twittersphere.  Chinese equities are setting up to make a big move.

Looking at overnight volatility in the TradeHawk charts and FXI is starting to show even more bounce as the algo engines kick into high gear.  Also, the more overnight volatility the better the chance for a gap move although FXI moves little during US market hours.  FXI had a $50 handle before all of this Trade War stuff kicked into high gear.

 

Charts by TradeHawk

Option Pit will do an and part of that webinar will be THE difference on buying or selling to achieve a goal.  The webinar uses commercial systems like TradeHawk to help investors set up trade ideas from inception to close.  The $FXI idea would be an example of the kind of trading setup traders might consider.

If a stock shows a pattern of increasing volatility what is the best way to attack the problem?  That is a question that must be broken down in multiple parts as in:

What is the market’s outlook?

What is my outlook?

How reasonable is my outlook?

Will the conditions change?

My question is can one answer those questions?  This is not the whole list but a simple outline of taking the available market data and using it to one’s advantage for setting up a position.  Thinking along those lines is big help to successful trading.  FXI is showing increasing volatility in the short term, am I a buyer or a seller?  I think one wants to own options in a mid-term time frame.  Option trading is easier if we ask the right questions.

 

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