🚗VIX Touches 12, Then Gets Cold Feet

[] [The daily rundown of everything happening at Option Pit.]( [( MARK-et Open Hey OP Crew, Vol Man here with my weekly analysis. A very reliable vol pattern is when SPX rallies hard, and VIX doesn’t (which usually isn’t good for the rally in SPX). Last week, I ignored my own theory and juiced my positions with some extra SPY calls. If I didn’t score on some iPath B Series Short Term S&P 500 VIX Futures ETN (Ticker: VXX) and VIX puts this week to balance the SPY calls, it would have been a bad week. Last week’s call: “Seems VIX just gets to the 13s, but I think SPX pushes closer to 4500 than 4300 next week” Yes and no. Note what we had this week in SPX/VIX. SPX was down 100 points, Vol was down across the board as the 4400 number proved too tough to hold. Also note, SPX down/Vol down usually suggests a bounce or a flat market for a bit. I will listen this time! [ SPX daily price action over the last 20 days VIX curve is in a steep contango, with the backend still pretty steep by historic standards with VIX futures pinned above 20 from Nov out. This is very normal for a bull market. [ Closing VIX curve, Jun 23, 2023 The VIX curve is back into a steep contango, and VIX drops now will be hard won. So, don’t expect an 11 handle until we have had 1 week of going nowhere fast for SPX. The Jul cycle could shape up in an interesting fashion because some expectation is baked into earnings now for big tech. As VIX stretches to Aug to cover the earnings, I think any drop to the low 12s will be a time to close Jul VIX puts. Unless there is a nasty surprise, we should see VIX 12 again with SPX moderately higher. Let’s Go! [/campaigns/org775804783/sitesapi/files/images/774695510/ag (2).png] Pit Report: MA Not Looking “Credit” Worthy This week, I have the vol call on Mastercard Inc (Ticker: MA). Below is my snazzy vol chart showing IV30 in red – yes, it’s at year lows. However, MA seems to be moving with realized vol (blue line) picking up recently. [ IV 30 in red and HV20 in blue for MA over the last year MA hasn’t really moved much in a month and is basically in the same place. So why is the realized vol so high? [Something’s up …]( - AG Profits In Pumps: Time to Evaluate Here we are just about half way through 2023 already. Almost hard to believe. I can remember New Year’s Eve 1999 turning to 2000. We went to a black tie party at the top of the Sears Tower in Chicago. Everyone thought we were crazy because of Y2K. Said we would get stuck up there. It was ridiculous. We had the best time and the fireworks were phenomenal from up there. Here we are 23 and half years later. How can that be? Half way through the year is a good time to review and remind ourselves of our trading rules. A good time to reevaluate what we are doing every day. Make sure we are following those rules. I don’t know about you, but I could definitely use the reminder. [Here it is – my seven rules for trading.]( - Licia OPTION PIT GLOSSARY [( There are plenty of terms in the trading world that need defining. The [Option Pit Glossary]( is here to help. Today's phrase is: Backspread: Net long option contract positions that generally have positive gamma and negative theta, and benefit from a bigger move in the underlying security. [( DISCLAIMER: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. The materials presented from Option Pit LLC are for your informational and educational purposes only. Neither Option Pit LLC nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. 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