|
|
Post by clinton on Nov 17, 2016 14:07:15 GMT -5
|
|
|
|
Post by clinton on Nov 17, 2016 14:14:35 GMT -5
wall st backed both candidates. was a no lose situation for wall st bankers.
|
|
|
|
Post by walnut on Nov 17, 2016 14:38:56 GMT -5
That is now the cleanest, healthiest looking VIX curve we have had in awhile. The bull is here for a period to come: vixcentral.com/Do y'all watch vxx? Thx. Yes, I watch it close |
|
|
|
Post by huh on Nov 17, 2016 15:56:15 GMT -5
GRPN looks like a swing long here (you won't see me say that often) from 3.88-3.98
|
|
|
|
Post by dino on Nov 17, 2016 19:44:19 GMT -5
That is now the cleanest, healthiest looking VIX curve we have had in awhile. The bull is here for a period to come: vixcentral.com/Is there a good Vix curve for dummies article, book, blog, whatever out there? Every time I try to wrap my head around the curve, futures, contango, backwardation, etc. my head starts to hurt. That curve (to me) looks like volatility is coming because it is sloping up meaning people are willing to pay more for future vix prices than what the current vix prices are. Right?!?!?! |
|
|
|
Post by walnut on Nov 17, 2016 21:32:36 GMT -5
Fairly true, but a moderate slope upwards is normal and reflects increased variance as time increases. If it slopes up very steeply, it might mean that investors are worried about volatility coming soon. That is what it was like a few weeks ago, and they were basically right. Once it is in backwardation it means that SHTF already and the market is in correction. It is the state of contango that allows you to short for easy profits at times, or can cost you alot for hedging. I would recommend going back and reading 2 or 3 months of this guys twitter posts, and his blog on www.vixcentral.com , he does a good job explaining the nuances. twitter.com/VixCentralHe seems mainly focused on using VIX as an insurance vehicle for hedging. I am only interested in shorting that sucker. |
|
|
|
Post by huh on Nov 18, 2016 8:33:01 GMT -5
The normal upward slope (contango) in the VIX curve makes sense if you keep in mind that VIX is a reflection of the market's expectations of S&P volatility by certain points of time in the future. So of course, the market usually expects less volatility in the next few days/weeks (spot VIX) and more over the next few months (VIX futures) because of the longer time frames. Understanding this also clarifies the crazy decay seen in stock options over longer periods of time since the premium of those options is reflected by the VIX price for that month. As those further months draw closer, S&P has already seen much of the expected volatility that was packed in the options' premiums in the past, so the VIX for those months decreases. And this is a good example why Walnut was so right on when he talked about selling options before, both calls and puts. Odds are they will decay over time, regardless of the strike price, especially those out of the money. Backwardation is a whole other beast. I basically think of that as traders/investors caught off guard by near term volatility, and then have to play catch up with the VIX future months to reflect the quick and surprising rising volatility in the nearer months or spot. And since the market is normally rising, and that's what traders expect(ed), when the curve goes into backwardation it usually means a falling market. Just my school-of-hard-knocks learning. I may be wrong on some points, but seems to work nonetheless.  |
|
|
|
Post by dino on Nov 18, 2016 9:59:09 GMT -5
Great points guys. Thanks to both of you.
|
|
