Volatility spikes up during the day

Discussion in 'Trading' started by a529612, May 14, 2007.

  1. What kind of "tell" is this if it spikes up 11% like today? Is it telling you some pullback is just around the corner?
  2. It's not necessarily a tell that this or that will happen...but with tomorrow's CPI numbers and Wednesday's housing numbers the VIX is likely reacting.
  3. If you are referring to the VIX there is nothing extraordinary about today's action. The way the VIX is measured it is always lower than it should be on Fridays and then looks like it moves up on Mondays. This is due to the simple fact that option market makers are running Monday's theoreticals by the end of the day on Friday. Today's move was a little larger than normal because it was a down day and there is important economic data coming up.

    What I find a lot more interesting is the overall level of the VIX through this large move up we have had over the last couple months. The SPX has only had about a 20 point range for 2 weeks and the VIX has not dropped. That can mean the traders "in the know" think that this market is in for some more measurable volatility, or it could mean that there is too much fear out there and the market can continue to climb the proverbial wall of worry. I would bet on the first explanation, but that's just me.
  4. duard


    Hard deck, reserve, cutaway, ripcord.
  5. Well, I have a question. On your thread you said that you are buying September 13 VIX calls. This may seem like a strange question, but how exactly are you buying Sept. options?
  6. Prevail

    Prevail Guest

    with the vix not dropping there is more upside to go.
  7. duard


    Ooops, cutaway main, reserve ripcord at hard deck.

    The question is what is your main chute pull level and what is your hard deck for reserve?

    May seem like I'm joking but the joke's on you if you don't get it.....