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 backwardation (near-dated futures are more expensive than long-dated futures).

But it is rare when there is a full 2-point premium between the first month and the second month out.

I see a TON of opportunity in this curve …

And a short futures spread is likely to win. 

Based on the curve, I want to sell April and buy May.

I also think, based on the curve, that February is a huge short.

In the free trade I put out to clients that emailed me back saying ‘SHOOT” we have seen a nice easy winner…

Even with the crazy moves, it’s up a quarter.

I think February is going to fall.

Like planking, it is EXTREMELY difficult for futures to fight gravity (the VIX cash in this case).

I would be a buyer of the Feb 23-20 put spread for about 1.30. I am pretty certain that is going to pay out nicely.

The VIX Light is Red … and that tells me this is likely to win.

Your Only Option,

Mark Sebastian

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