Being short volatility when the S&P is only 10 pts above 800 seems a little too contrarian, even for my tastes. When I see these periods of VIX complacency, it really gives me a creepy feeling that something ill is about to go down, but this is just my humble opinion. I guess we'll see.
To me the 'congrats' comes only after the position is closed and the risk is eliminated. If guy shy, then so be it. You DO NOT want to force trades. You want to trade when you are comfortable with the trade: That means the risk and potential reward are both acceptable. Mark
You are right, the risk/reward for IC don't seemed very attractive to me this time, the premium collected is low and the IV seemed to me in lower range now.. I am in sideline this time..
Yes indeed. I think that it is important for people to remember that volatility begets volatility, and the VIX is still at historically elevated levels. 40 is the new 20 for the VIX, so I would be a buyer and not a seller of Vega at the lower 40 levels. This morning's action is still extremely complacent in light of the S&P levels. These giant birds with their heads in the sand will have to come to grip with reality sometime. We're way overdue for a nice, vertical VIX spike.
I don't think it's 'overdue' but I would not be surprised to see VIX rise. If that happens, it's an opportunity to sell more vega (in small amounts) - but only with strategies that have limited risk. By giant birds, are you referring to condors? they aren't that large. Heads in the sand? I'm unaware of the ostrich spread. Mark
To clarify: Giant bird with head in the sand = OSTRICH OSTRICH SPREAD = Shorting volatility near 52 week lows and being long of large, sandy holes.