Vix is so low now

Discussion in 'Options' started by noob_trad3r, May 19, 2009.

  1. I noticed it looked like it went under 30. And I am sitting on the sidelines right now I probably wont write any covered calls for june since the premiums are so stingy now.

    Why is the VIX so low?
    Topazy likes this.
  2. What makes you think it's low?

    It's far higher than it's historical average.

    The market has been less and less volatile that in was just a few short months ago.

    The market has also been rallying.

    That combination makes investors less panicky. No one is scared. No one is rushing out to buy puts, pushing VIX higher.

  3. Pascal


    It's going to spike over the summer. Just wait until after memorial day holiday.
  4. rros


    Just a comment from a newbie. Vix was trading just like this at the onset of the last bull market on Ap. 2003. It broke support below 30 and never looked back. We may be at an inflexion point. Watch for two more initial claims below April's peak (next one on Thursday) and also the coming leading indicators... unless there is some shocking news coming. Then, it's deja vu all over again.
  5. How is the VIX low? Obviously you haven't been trading for a long time because back under normal conditions when the VIX goes above 30 people think we've reached a panic capitulation!
  6. I have not been trading for long so what is the normal number typically? (about a little over 1 year and some)

    So does this mean that stocks might have bottomed already?
  7. Below 30 for sure.. if I were to guess the ultimate average would probably be low to mid 20's -- the VIX can be read a million ways. It depends if you're trying to develop a trading strategy based on what the volatility will be or if you're actually trying to predict market direction based on the VIX.
  8. I wonder if it will go up around september/october. I remember when it was 78 at one time.
  9. It was higher than 78 I believe, I remember selling VIX 100 calls during the height of the insanity.
  10. IF you thought it could go back up would buying one or two of those new VIX options be useful.

    Right now my only experience is selling puts and writing covered calls. But those premiums are pretty low now.
    #10     May 19, 2009