VIX trade ideas
VIX BEARS WILL DOMINATE THE MARKET|SHORT
Hello,Friends!
VIX pair is in the downtrend because previous week’s candle is red, while the price is clearly rising on the 4H timeframe. And after the retest of the resistance line above I believe we will see a move down towards the target below at 15.90 because the pair is overbought due to its proximity to the upper BB band and a bearish correction is likely.
✅LIKE AND COMMENT MY IDEAS✅
Vix 5 wave impulse pattersn repeatingBeen comparing the past two VIX 5 wave patterns. Wave 5 really gets going. Repeat this timer again, debt ceiling, Taiwan invasion by China, Iran V US shipping, Ukraine debacle, Biden bribes looking really real - impeachment pending and his own party will do it, bank failures increasing, commercial real estate foreclosures rapidly increasing, do I need to go on because I actually could. the most amazing indicator is that with all these candidates, equities just keep going up, the bull will NOT stop, the Greed factor is off the charts, and that's when the black swan appears. You decide.
$VIX threw in the towel long agoTVC:VIX mini inverse head & shoulder pattern has gone way of dodo bird
Long term trend has been broken for some time
We stated long ago that the direction this would be broken would show how #stocks would react
What does SP:SPX look like it wants to keep doing?
Will post quickly right after this
#SPX #VIX
S&P still within Range when I first highlighted in JanuaryThe market is at crossroads again.
Whenever you have lows in the VIX people will highlight the potential risk to the market, we also in that period people coined the phrase "Sell in May and go away"
My view is unchanged to remain in the camp of a move lower with a decisive break of first of 4100 area.
But I have listened to arguments on both sides of the argument, those proposing a move to the 4400 area and the bears arguing lower.
So while 4150/4200 remains intact as the resistance I remain bearish but can't think of a catalyst at the moment to drive prices higher.
Good luck, do your research and investigation and make up your own mind.
VIX (@) (@) watch itHi,
If you're trading crypto i'd be watching the VIX.
Here's some insight.
1- high vix ( meaning good opportnity to buy volatile assets like BTC)
1 - low vix ( everyone to comfortable and thinks we may bounce to the moon)
This is just simplified version obviously.
Personally I think over the recent weeks of meme tokens fortunes / and people comfortable with buying crypto as it's been bouncing at every trendline, this means we are in for a flush out.
Questions to ask yourself:
1 - A flush to induce the fear + liquidations likely or unlikely ? / Can the VIX bounce at this stage?
2 - Is the Key inflation data 10/5 is the negative news required for the flush out?
3 - or will we just go to the moon and all be millionaires?
Key takeaway: Don't buy meme tokens if you're not willing to lose it all
$VIX gearing for a return of volatility post May expirationVIX volatility has been bottoming out over the past week, hitting a 15 handle last week. It's possible we may see that again this week. But the stars have aligned here using this Gann fan to pinpoint where we'll hit through the 2/1 line on the fan likely hitting as high as $22 sometime before the end of the month as the Debt Ceiling debate heats up, banking crisis continues, Fed speak flows and markets adjust to the idea that June may not be a pause.
🟩 VIX is continuing to improveVIX DROPS SIGNIFICANTLY 📉
The VIX has experienced a dramatic decrease, which is crucial to observe as we shift from a bearish to a more favorable market. Similar to what occurred in December and at the start of the year, the 28 level serves as a warning signal, particularly after a substantial market movement. This indicates that the market may be overheating, and we should be on the lookout for a potential bear market. Throughout the recent bearish phase, the VIX remained elevated above the 28 level.
SEEKING LOWER LEVELS 🎯
Ideally, we'd like to see the VIX return to lower levels. While occasional upticks are expected, it's important that they remain within the lower historical ranges. Lower volatility benefits the indices, but it's equally important for individual stocks to exhibit reduced volatility as wel
Dec VIX closing is very, very important!Monthly line charts are so simplistic; yet so important to analyze.
If you've read my previous DOW posts you know we are closely following the 2000-2002 bear market cycle vs. any other bear market and this chart further confirms my thoughts.
Notice how the VIX today (2017 to present) vs. the VIX 1994-2000 timeframe is diverging with the S&P. Both are making higher highs and higher lows until something breaks. In the 2000-2002 case we had the dot com bust (Rate of Change in very high risk/internet stocks plummeted) while today we have the Bond bust (Rate of Change within the bond market has plummeted). Towards the end of the VIX/S&P divergence (in the 2000-2002 case) the VIX ended up remaining "in trend" while the S&P lost about 46% over a 2 year period (see below chart). The VIX remaining "in-trend" for such a long period of time was a warning that something was going to break at some point and the indexes eventually lost a fair amount of value over a 2 year period.
In sum...my thoughts:
If we close Dec VIX below the blue dotted; Oct low will hold
If we close Dec VIX above the blue dotted line; Oct low will NOT hold.
Vix at alltime tops of 2 flirting around 3 support for 3 chanelsAny drop from here indicated by bearish reversal vix traders may expect it to nose dive ,if you are on stock indices (us30,us500,us100 and dax 30 ) go long for bullish reversal pattern as the stock have almost negative 90% correlattion
stocks always tops when vix bottom and bottom when vix tops this instrument as an indicator is being used by institution and they dony want to looose money so for as long you trade alongside the with patience you will seldomly go wrong
$VIX back into Triangle Pattern, $SPX toppishTVC:VIX gaining some momentum on the daily but cannot deny the damage that was done to it last month
#VIX is a tad harder to chart but it does look like it wants to bottom here
Opening AMEX:VIXM put selling strategy = bull
Keeping tight stops @ support levels
Ten Trading Lessons by the Terminator - The Judgment Day is NearNow listen to me very carefully, folks! I’ve got some important intel on our new mission, and it’s in the financial markets. Yeah, you heard me right, we’re diving headfirst into the world of finance. Buckle up, buttercups, because this is gonna be a bumpy ride.
Now, there are ten crucial mission parameters to keep in mind when it comes to finance, and I need you all to pay attention. These aren’t your average market moves, so we need to be on high alert.
- First off, the markets are turbulent. That means it’s a wild ride, and those textbook curves and lines don’t mean squat here. We’re talking extreme price swings, so buckle up. Forget the boring fictional "ideas" of traders who never actually traded - this is a whole different ballgame.
- Secondly, these markets are way riskier than you could ever imagine. You'll be taking on more risk than a cat burglar with a death wish. And don't forget, trouble comes in streaks and turbulence tends to cluster, so be on high alrert and ready for anything.
- Timing is everything in these markets, folks. Big gains and losses happen in a flash, so you better be prepared for intense action.
- Prices in these markets often leap, not glide. You can forget about predictability, because time is as flexible as a T-1000. It’s impossible to know what you’re in for. I repeat, prices don't just slide around smoothly like a greased-up ice skater. Nope, they often leap around like a kangaroo on crack. That means they're unpredictable and risky as all get out.
- Don’t expect your past experience or information from other markets to be of any use here. These markets are like Skynet, they work in all places and ages alike.
- Uncertainty is the name of the game in these markets, and bubbles are inevitable. You’ll need to navigate through these bubbles and be ready for anything.
- Markets have a personality of their own, troops. They’re not driven solely by real-world events, news, or people. When investors, speculators, industrialists, and bankers come together, a whole new dynamic emerges, and it’s more powerful and different than the sum of its parts.
- Don’t be fooled by patterns, they’re like the fool’s gold of financial markets. The power of chance can create spurious patterns and pseudo-cycles that appear predictable and bankable. But don’t be fooled, bubbles and crashes are a part of these markets.
- Forecasting prices might be perilous, but you can estimate the odds of future volatility. These markets are turbulent, deceptive, and prone to bubbles and false trends, but evaluating risk or profiting from it is another matter entirely.
- And finally, the idea of “value” has limited value in these markets. Value is just a single number that’s a rational, solvable function of information. But given a certain set of information about an asset, it might not be as valuable as you think.
Remember, troops, we’re in for a wild ride here. These markets mislead, and there are no familiar sine or cosine waves to rely on. But there’s a system to this madness, so keep your heads up. If the price changes start to cluster or the prices themselves start to rise, they have a slight tendency to keep doing so for a while – and then, without warning, they stop.
The future's not set in stone, my friends. There's no fate but what we make for ourselves. So let's navigate through the chaos and come out on top.
Alright, that’s all for now. Later, dickwads. And remember, chill out. We’ve got this.
Celebrating 50 Years of Equity Options TradingAmid serious pushback, Chicago Board of Options Exchange (CBOE) went live on 26th April 1973. Options are now a standard tool for portfolio risk management. Not so, back then. They were seen as gambling instruments for reckless speculators.
Shortly after CBOE launch, Fischer Black, Myron Scholes, and Robert Merton provided a mathematical model for computing options prices.
This Nobel Prize winning model allowed options to be priced theoretically for the first time. It was a key driver in making options markets sophisticated, more efficient and much larger.
The Black Scholes Merton model ("BSM") forms the fundamental basis of options pricing. It allows traders to compute a theoretical price to options based on the underlying asset’s expected volatility.
Expected volatility is referred to as implied volatility (IV). Why implied? Because it is the volatility implied from an options price given other parameters from the BSM model.
COMPREHENDING BSM & BLACK76
Options have existed since the 17th Century. Option were limited to speculation and gambling in the absence of a sound and suitable pricing model such as BSM.
BSM offers a mathematically sound framework to compute theoretical price of European options using five inputs:
1. Underlying Asset Price
2. Implied Volatility (IV) of the Underlying Asset
3. Interest rates
4. Exercise (Strike) Price of the option
5. Time to expiry
A variant of the BSM for pricing options on futures, bond options, and swaptions is the Black Model (also known as Black76) which forms the basis of pricing options on commodity futures.
BSM is far from perfect. For starters, it makes unrealistic assumptions. Such as that stock prices follow a log-normal distribution and are continuous. That future volatility is known and remains constant. BSM assumes no transaction costs or taxes, no dividends from the stocks, and a constant risk-free rate.
Even though these assumptions are impractical, the BSM provides a useful approximation. In fact, the model is so commonly used that options prices are often quoted as IV. On the assumption that given IV, options price can be computed using BSM.
Actual options prices vary from theoretical ones based on supply-demand dynamics and with reality being different from the assumptions baked into BSM.
For instance, actual prices for the same expiry and at different strike prices have been observed to have different IV. Primarily given a higher likelihood of a downside plunge relative to upside rally. This difference in IVs across different strikes is referred to as volatility skew.
OPTIONS IN SUMMARY
Options involve two parties whereby one party acquires a right to buy or sell a pre-agreed fixed quantity of a stock/commodity at a pre-agreed price (the strike or the exercise price) at or before a pre-agreed future date (Expiry Date).
One party acquires the right (Option Buyer or Option Holder) and the other party takes on the obligation (Option Seller).
In consideration for granting the right, the Option Seller collects a premium (Option Price) from the Option Buyer.
To ensure that the Seller keeps up their promise to trade, such Sellers are required to post margins with the Clearing House.
Once buyers pay premium upfront, they are not required to post any additional margins with the Clearing House.
Where the Option Holder secures a right to buy, it is known as a Call Option. However, if the Option Holder acquires the right to sell, such an option is referred to as Put Option.
Where the Option Holder can exercise their right at or before any time before expiry, such Options are referred to as American Options.
Options that can be exercised only at expiry are referred to as European Options. While exercising is permitted at expiry, these European options positions can be closed out before expiry by selling out a long position or by buying back a short position.
Premiums for European options are typically lower than premiums compared to American options.
COMPREHENDING WALLSTREET’S FEAR GUAGE, FADING VIX, AND VIX1D
The CBOE Volatility Index (famously referred to as VIX and is also knows as fear gauge) is a real time index measuring the implied volatility of the S&P 500 for the next 30 days based on SPX Index options prices for options expiring in 23 to 37 days.
There are a range of financial products based on the VIX index allowing investors to hedge volatility risk in their portfolios.
In recent months, VIX has been fading into insignificance. Despite huge price moves in the S&P 500, VIX has remained staid. Why such inertia? Primarily because options markets have started to shift towards shorter expiries. Zero-Days-To-Expiry (0DTE) options now account for more than 40% of overall S&P options market volumes.
These very short-dated options allow traders to express views around specific events such as monetary policy meetings and economic releases. Their popularity has increased dramatically over the past few years, with volumes today nearly 4x that of 2020.
To account for this shift in market behaviour, the CBOE has launched the VIX1D i.e., the One-Day VIX. This index tracks the expected volatility over the upcoming day as determined by zero-day options prices.
More on Options Greeks and Risk Management using Options in a future paper.
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This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
