Remember, that the opposite happens as well. Price can move up and the call can go down as implied volatility moves down with the news event occuring. I've seen this happen to ES options with payroll numbers, interest rate announcements, etc.
Jeb, you'll get no argument from me about anything you said. There was a time when I traded silver and gold options on the comex floor, and your story sounds completely credible. But the volatility patterns of SPX are the exact polar opposite of the volatility patterns in metals (and all other natural resources for that matter). In metals, the otm calls almost always trade at a higher volatility than the otm puts. The tendency is for IV to rise when the metals rise, and drop when the metals drop. Just the opposite of the SPX. Nothing about the future is certain and of course tomorrow the S&P500 could rise sharply and the VIX could explode. I'm just not aware of any time when that has happened. Generally speaking, the inverse relationship between the S&P500 and the VIX is among the most rigid and reliable in trading.
Yes, that is very typical behavior. The oddball event is when prices jump to the up side so fast from a very sedate market that implied volatility explodes enough to make put prices go up. I remember that gold move from the 1980's or 1990's as I had never before seen put prices go up in conjunction with a large one day up move. I think it might have happened just before the "Volume Investors" COMEX clearing firm went under in March, 1985.
I agree with you about the inverse relationship between the SPX and VIX (and VXO), as I can't give any counter examples. My concern was having someone believe that such a relationship existed across markets. I think that the gold options event I remember happened in March, 1985 and resulted in the very messy default of the COMEX clearing firm "Volume Investors".
I was asked about my overbot indicator on the S&P 5-minute chart - see atatched chart; usually good for a 4- to 5-point move in S&P futures. Green is a possible buy point, red is a possible sell point; these are minor variations of the normal indicators.
Come on lets be serious here. There is no way you have that size of an account. I'm not an expert, but I think each SPX put margin is at least 10,000 (I think $17,000). And then of course, you need to have plenty of excess margin because you wouldn't want to get stopped out if the premium goes to 5, or 10 for that matter. You would need a 2.5MM account to make sure you have excess liquidity.
spx 1150 puts require $11500 margin if you have reg-t, and about 2000 if you have portfolio margin, assuming no other positions. you'd need about $750k to safely hold that position.