iVol Trading

Our signals are suggesting that adding some long volatility positions makes sense at this time. This could also mean simply moving more to cash or reducing equity exposure. Given current levels, simply replacing long equity exposure with option positions could also make sense.

I wrote the first article on the VIX options back in 2006. It is amazing to me that we have come so far in the volatility space and yet there are still so many out there that really have no idea what they are getting when they buy something like the $VXX. I take it… Continue reading How time flies…

Yesterday our systems triggered on $VXX and we bought some $VXX 12.5 puts expiring at the end of the week for $0.28. They have doubled since then. We expect that the volatility crush will continue for the next couple of days, but that the VIX will remain above 10, and likely above 11. The rebound… Continue reading VXX puts playing out

Most people think that volatility comes in spikes (if they think about volatility at all). But volatility begets volatility and usually comes in waves, not isolated spikes. This makes the recent action that much more interesting because we have seen increased volume in the VIX based products with each of the “spikes” over the last… Continue reading Volatility Spike Sellers

Buying $VXX and $TLT Weekly call backspreads to hedge more potential downside over the weekend. Unless the “other shoe drops” equities should see a bounce into Monday, but given all the “unknowns” the probability of another leg down is entirely possible. And this wave of volatility is almost certainly not over, so positioning appropriately is… Continue reading Hedging the Weekend

Gold triggered a trade and the GLD puts are paying off well. Bought at 11:28 for $0.43, sold at 1:06 for $0.76.

Bought the VXX 12.5 Weekly calls for $0.13 this morning at 11 am on the weakness after coming back from a few days of vacation. They were $1.20 at the close.