A Day in the Life of the VIX

By Surly Trader

Light volume, boring trading, reaching for all time highs on the S&P 500 and the VIX tumbles into the close:

Where does this drop put us in history?  Oh, just back to February 2007:

The option players don’t buy the euphoria though as the Credit Suisse Fear Barometer (CSFB) Index indicates:

Which side of the fence are you on?

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Surly Trader

Share Trading can be stressful, but playing a rigged game is worse. SurlyTrader will explore the hidden game of financial institutions and the government that supports them while providing useful tips on trading strategies, hedging and personal finance. SurlyTrader is a portfolio manager at a large financial institution who specializes in trading derivatives.

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Comments

  1. So long as our pals at the Fed are holding up the market VIX will fall and the major equities indexes will rise. The trick is to buy the cheapest (nearest term) put on your favorite index (or calls on VIX) that doesn’t leave you hanging out to dry before expiration. So when are the inflation hawks going to start crowing at the Fed? Pick a maturity beyond that date and you should have a winner. Looks like your pros (options traders) are doing just that.