On this episode Mark is joined by:
- Mark Sebastian, The Option Pit
- Russell Rhoads, Kelley School of Business – Indiana University
- Matt Amberson, Option Research & Technology Services
They discuss:
- The latest in the volatility markets in the US
- The international volatility market (VSTOXX)
- Interesting trading activity and developments in VSTOXX, VIX, SVIX, UVIX, UVXY and VXX
- Options Volume Numbers for November
- Their Crystal Ball predictions for VIX and VSTOXX
- And much more…
Brought to you by Eurex and Public.com
TRANSCRIPT
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And now it’s time to take a deep dive into the world of volatility.
It’s time for Volatility Views.
All right, everybody.
That music means we are back.
Did you miss us?
Yes, we were off for the Thanksgiving holiday last week, but now we’re back and ready to talk some vol.
Yes, it is time once again for Volatility Views.
My name, of course, Mark Longo from the options insider.com as well as on the network upon which all of you folks are main line.
A couple of things remind you of right at the top of the show.
First off, for you, Volview’s hard cores, you know who I’m talking to.
Make sure you listen into the full network.
Man, you are missing out on nearly a dozen other shows if you’re doing that.
So upgrade wherever you’re listening.
It’s available on every platform under the sun.
B, show some love to the folks who show some love to the show that you’ve loved for years.
Yes, they’ll go on over to public.com/vb.
It’s literally the easiest landing page we’ve ever promoted here on the network.
That’s all you got to do once you’re there.
If you want to kick the tires and light the fires on a free rebate or two to trade your VIX options.
Hey, there are worse things on the planet.
Also lets them know you’re coming to them from Volview’s and it gives them a little love for loving the show that you love over there on the vol side.
And of course, if you want to go above and beyond, you want to come back.
We’re going early today.
We’re going options oddities right after Volview.
So no rest for the wicked.
If you want to get in on that action, only one place to go.
The options insider.com/pro is the place to go.
Should be a good one if I do say so myself.
As we go around the horn and see who’s joining us on the old program today.
First let’s go out to the southern volatility Mecca.
It’s been a while since we’ve been down to Austin where we are joined once again by the greasiest of meatballs, Mr.
Mark Sebastian from optionpit.com.
Mr.
Meatball, welcome back to the show.
How was your turkey day in Austin, sir?
Oh, it was great.
Happy.
Thanksgiving was great as well.
Good to get to hear from you, Mark.
I decided to be on the show.
You have to wear a bolo tie for Thanksgiving now that you’re down in Austin.
Oh, I had to wear two bolo.
Two bolo ties.
Wow.
Doubling down.
I like it.
Truly embracing the lifestyle down there as we rotate a little bit closer to home out to the hinterlands of Chicago or maybe Indiana.
I’m not sure.
Let’s find out where we are joined once again by the man holding down the Urex hot seat.
Mr.
Russell Rhodes.
Mr.
Rhodes, welcome back to the show, sir.
As always, I’m very happy to be here.
I’m actually at my workspace in Downers Grove.
I’m moving around on you.
Downers Grove.
Look at you.
Just jumping all over the place.
The hot Mecca of all that is Downers Grove there.
Right.
And then we turn the dial one final time all the way out to the east.
Not quite as far as yesterday on the option block when we went all the way out to Amsterdam.
Nope.
Up at the shores of the continental U.S. these days right on the shoreline in New Hampshire.
Most folks don’t even know it exists.
It’s there.
It’s small, but it’s there.
We are joined once again by the Oracle of New Hampshire himself, aka Mr.
Matt Ambersen, the or the easy for me to say the auto father from Ora.
It’s Mr.
Matt.
Welcome back to the show, sir.
Thank you.
You can go on Google maps.
I’ll be the one waving my hands and you can see you can see on this small coastline here.
You’re the one guy standing on the shore of New Hampshire.
All right.
With the team assembled, let’s dive right on into the volatility review.
It’s time to break down the latest developments in the volatility trading world.
It’s time for the volatility review.
All right, everybody.
Let’s get down to business.
A little bit of the old volatility review, the portion of the show where we break down all that’s cooking in the world of vol vol trading, trending analysis, unusual activity, all sorts of fun perspectives and coming into the start of the show.
Remember, we’re going back two weeks since our last show and we’re seeing markets today.
Listeners looking decidedly mixed after a whole mess of green post election.
Finally starting to take a little bit of a pause, even though we are flirting with intraday highs, it seems like early in the session, most sessions today, S and P up about a quarter of a percent.
The Dow off about two tenths of a percent and our old pal small caps up about four tenths of a percent out there.
And again, since our last show, we have seen vol mostly come off.
We were about 16 even on the show last week, this week, about 13 even as we’re kicking off the show and Vicks cash.
So that puts us down about three points.
All of vol itself also continuing to erode at about an 87 as we kicked off the show down about 13 points from where we were two weeks ago.
So of course, listeners, we are heading into that seasonally quiet period.
Again, all bets are off.
I mean, look at the dog days of summer this year, some of the hottest options action we saw all year.
So past is not always prologue, but if it does play out like recent past, we should see a little bit of calm towards the end of the year.
But then again, I don’t think anyone had, you know, martial law in South Korea on their bingo card this week.
So there still are some potential hot spots out there that could add to a little bit of all.
Hence our question of the week.
We’ll get to that in a little bit.
But first, let’s go around the horn.
Let’s get everyone’s thoughts on what we’re seeing out there in the ball space.
Let’s go out to the shores of New Hampshire first.
Mr.
Matt, sir, what’s catching your eye in the world of vol this week?
Yeah, I’d like to look at the risk assets first.
And I love looking at the components of the Russell index and not Russell roads, but the IWM, RUT.
And if their slope is high, that means that they’re buying calls and the puts are low relative to calls.
And that’s the way it is.
We’re almost at a since we’ve been measuring it high, it’s like people are just buying calls.
We saw what happened in Bitcoin, ran up to 104 and then someone sold 400 million dollars worth and it went down to 90,000.
And I mean, everything just seems like there’s a big exhale and going into a big balloon in a lot of these risk assets.
Call is coming down, markets going up, risk assets are being purchased.
A lot to be concerned with out there at Mark.
That’s what I’m saying.
Well, you’ve been concerned for a while.
You’re always semi bearish these days.
You hate this market more than more than you can recall in recent memory.
Is that still the case, sir?
Anything changed since the last time we chatted?
Just that I was thinking that what might happen is just kind of a blow off top happens.
And some of these efforts such a long bullish market, but still, it still remains that you have to be very careful.
I mean, I’ve seen some people saying 80% correction.
I’m not that bearish, but I think it just looks ugly out there.
Copper to gold, employment numbers, price earnings multiples that are baked in, it is not even close to what’s going to happen.
So that’s what I’m looking at.
Again, you could remain, or the markets remain irrational longer than you remain solvent.
But that’s why you want to have little put calendars on just in case something happens.
And then when it starts to get ugly, you could get a little bit more aggressive is kind of how I’m looking at it, Mark.
An 80% correction.
I like to make the person who’s calling for it.
Can you imagine 80% off the top, what that would look like from a market and evolve perspective?
My goodness, that would be the mother of all corrections.
Wow.
Interesting, interesting stuff out there.
Let’s keep rolling to another man who I think it’s fair to say is not exactly a fan of this market right now.
He’s been short for a while.
He is the once in future.
Dr.
Vic slash V stocks beaming to us from his new office compound in the Mecca of Downers Grove.
Mr.
Rhodes was catching your eye from a vol perspective out there this week, sir.
Do me a favor and I’m just going to cover my short because you know the second that that happens, it’s going to sell off.
There you go.
But you’re welcome.
Here comes 80% to the downside.
It didn’t necessarily catch my eye, but I heard a, um, I listened to a, to a short webcast by SIBO and I thought I heard them say that some of the VIX upside, um, although we don’t have a lot of VIX upside right now, but some of the upside to VIX was actually some people buying calls in case we get a year in rally.
I don’t see that in the term structure.
And I want the other guys to correct me if I’m wrong, but I was listening when I was driving back from, from IU yesterday.
So I didn’t really get to scribble down a note or anything.
I just, I had in my mind to check the numbers and I’m just not really seeing, uh, what they talked about and they didn’t really quantify that one.
Um, you know, that’s one thing within the, you know, within the vol space, I’m keeping an eye on, uh, looking at all the different Bitcoin options that are out there.
You know, I know I did the pro Q and A earlier this week and I, uh, I talked about how I’d bought some, some deep in the money IBIT puts, uh, and I’m looking for, uh, you know, maybe looking for, for a lower level in IBIT to maybe sell, sell some puts against the longer data puts that I own.
Um, and then something else just, it’s totally out of nowhere on you guys.
And I hate doing this to you, but, um, I’ve been fighting short China for some time, uh, using one of the inverse ETFs.
And the freaking, you know, which means if China crashes the, um, the, the, you know, the, the calls are what you want to own in that case.
Cause it’s an, it’s a triple inverse ETF.
Um, the, I’ve been able to, to like buy in the money options on that thing without a whole lot of time value.
The time value is absolutely an implied vol is absolutely ridiculous.
I don’t know if there’s some sort of known unknown, uh, on the horizon this weekend for China because they do release their economic numbers on Saturday, which is a great day to do that.
But um, I, I, I, one of my various thesis things on the U S market is that China’s going to have some problems and, and drag us down with them to a certain point.
I have never seen it so expensive to get short China right now.
Give our listeners the ticker for that so they can play along at home, sir.
The China ETF.
Yang Y A N G.
Of course it’s there you go.
Listeners check it out for you.
The direction when direction daily.
Okay.
There we go.
Listeners check it out for yourself.
So it brings a smile to that face.
I’m not sure why.
All right.
Let’s keep rolling out to the Southern vol Mecca, by the way, you hardcore is in the chat.
You, you sling in a little Chinese ball out there these days.
You, you’re putting down what Russell’s selling out here.
Let us know.
Uh, miss go out to the Southern volatility Mecca.
Now Mr.
Meatball, sir.
Really a lot going on in the vol space since we last chatted, sir.
What’s been catching your eye?
Yeah.
Well, to Russell’s point, I’m wondering if this has to do with the massive, um, levered ETF buying that we saw earlier in the week in like CHA you and then there’s the triple Chinese ETF they bought a bunch as well.
But I want to say it was either Monday or Tuesday.
They bought 200,000 of the May 15 calls in CHA you.
And then, um, Matt, you remember the symbol for the triple ETF?
Um, it was, uh, they bought a ton of calls in that as well.
Um, I want to say like a hundred and 110,000 or something like that.
I’m wondering if that’s what goosed up the vol so much and maybe not the downside.
That could certainly be out there, sir.
We’ll have to go dive in and check it out.
Anything else catching your eye, sir, before we roll on into the vol?
Yeah.
Well, to Russell’s point, I know we’re going to talk about term structure over here a little bit, but, uh, and the options trading, but you know, I look and Jan does look a little bit expensive relative to the rest of the curve.
Um, and, but VIX itself really kind of taken a dive.
It’s our, our dip below 12.
I forget what my guess was two weeks ago, but, um, I remember I was on the low end.
Uh, so we might, uh, we might be cashing the cash in the register here.
Mark might be a little chiching day for the meatball.
We shall see when we get to the crystal ball in a little bit.
Since you mentioned the vol surface, let’s get out there now.
Listeners and a spoiler alert.
It is lower than the last time we gathered here around the vol table two weeks ago.
Listeners.
Last time we were here, we had the cash hanging out exactly about a 16 and looks like the highest we got.
If you went all the way out to the middle of next year to July of 2025, we’re a little bit north of 18, about an 1820 in that vol surface.
Now it’s funny, we’ve seen a little bit of evolution, but the longer term portion, if we go out to, let’s say August, let’s go out a month now beyond that, that’s up to about an 18 and a half right now.
So kind of to the point Mark was making is some interesting little potential hotspots here on the curve.
Again, the cash, obviously three points lower that front future, that DS future down nearly two points, about 1.85 or so from where it was this time a week ago, the Jan future that Mark was just talking about down, not quite as much down, almost three quarters of a point from where it was last week at about exactly a 16, even when we kicked off the show.
So potentially a little juicy.
Mark is that, is that was catching your eye out there a little bit?
Do you think too much juice in that Jan future, sir?
Yeah, I do think there’s a little too much juice in the Jan future.
So are you looking for some, some calendars against Jan?
What are you up to out there, sir?
You know, I’m not entirely certain what I’m going to do there, but you know, when you look at the curve as a whole, yeah, short Jan, long Feb, short Jan, long March seems to make a little bit of sense.
Is that Jan a little bit maybe of the leftover Marshall law premium just trickling out to Jan people like maybe the end of the year going to be sleepy, but then beginning of the year, all bets are off.
Who knows what madness will unfold, sir?
Yeah.
Yeah.
People forget that the first couple of weeks of January, the last four or five years have come roaring out of the gate.
Pretty hot.
Six of, you know, back in 2020 and of course the pandemic a few months later, but the first week of January, we assassinated that Iranian general on the tarmac and then kind of all bets were off from there.
So we’ve seen a lot of crazy things happen in the very first couple of weeks out of the gate.
Of course, January of 2021, who can forget the first couple of weeks when the meme stock craze really kicked into high gear with GameStop.
So we’ve come out of the gate like a lion a lot over the last few years.
Let’s go around the horns.
Go to Matt.
Matt, what are your thoughts on what we’re seeing in the term structure?
And are you buying what Mark is selling that maybe Jan is a little bit too juicy, sir?
We know that Mark asked me about chow and we know that Yang is the three X bear.
There you go.
The three X pole in.
Of course.
Of course.
How beautiful is that?
I love that.
I love that.
That is good.
That is good.
All right.
Tip of my cap to them for their naming convention.
I like that.
And then just like I look at the slope, you know, the put call slope of the of the VIX.
It went down, went way down, meaning they’re they’re buying some calls.
It’s actually come back a bit.
So but they had bought a bunch of calls.
So to what Russell was saying, I do think there’s some some some weird stuff going on and the way out of the money is right now, as far as the term structure goes.
Yeah, I mean, I just think that it’s just sliding down.
It’s just a contango like, you know, nothing’s moving this until, you know, what else has to happen?
You know, there’s wars going on, threats of nuclear war.
There’s invading different countries.
It looks like Syria is getting run over and in the VIX goes down.
It’s just hard to fathom, you know, the disconnect here.
So that’s what I’m saying, Mark.
Yeah, we were.
Russell was on with me on the pro Q&A of the day that Korea declared martial law.
And I believe their index is closed up that day as well.
So even in Korea, they were they were kind of shrugging off this madness.
Mr.
Rhodes, sir, the last word is yours.
What is catching your eye out there on the term structure right now?
Well, Sebastian brought it up already that we’ve got that little, you know, that the January contract is suddenly looking a little, little pricey relative to December.
But if you go if you start to go out to February, we’ve got another 90 cents to the upside.
So even though January is a bit expensive, if you think, you know, we’re going to get some craziness in the first two or three weeks of January, like you mentioned that we have before, I could see buying Jan and Shorten Fab totally see buying Jan Shorten Fab with that.
And I’d like to see it a little bit wider, but you got to take what the market gives you.
And so I even though January is a little, a little high relative to where spot is, that might be something to keep in the back of your mind if if you think history is going to repeat itself.
Let’s look at a little history right now in terms of volume.
Listeners, the numbers are out from our friends over there at OCC.
We’ll get into the full volume breakdown coming up on the option block next week.
And Matt and I will go into it in more detail on the next episode of the Advisors option.
But through this show, we like to look at it through the lens of the futures and the futures have been Vicks Futures, obviously, is the lion’s share of what they’re clearing over there at OCC.
Listen, as they have been quite the dark spot of lay, I believe in October, they were down about a third from where they were year over year.
So it seems like they are finally clawing their way out of that gutter.
Listeners ever so slightly Vicks Futures volume 4.26 million back in November of last year, this past year, of course, this past November 4.43.
So up a little over 4.1%.
Obviously, they’re not just clearing Vicks Futures over there.
There’s more and more things being added to that list all the time.
But the lion’s share still is Vicks Futures.
So interesting to see that the Vicks Futures managing to at least go positive from a volume perspective out there and obviously a very hot explosive month of November.
But speaking of explosive, Vaal over there, been kind of explosive of late.
Is that still the key?
I mean, things going on, French government now potentially imploding all sorts of things going on.
What’s going on from an international Vaal perspective?
Let’s find out right now, listeners.
It’s time to explore what’s happening in the volatility market beyond our shores.
It’s time for the International Volatility Review.
The International Volatility Segment is brought to you by EuroX, home of Euro Stocks, V Stocks, DAX and the German government bond-based Eurobund, Eurobabel, EuroShots derivatives.
EuroX is the leading European derivatives exchange.
Learn more about trading V Stocks futures and options, the European volatility benchmark at www.eurox.com/vstocks.
All right, everybody.
Welcome to the International Volatility Review, the portion of the show where we go a little bit beyond our shores and see what’s popping off in the Eurozone when it comes to volatility.
And you might be forgiven for expecting maybe a little bit more juice.
I mean, we are in that seasonally quiet period, but then again, we are seeing the impending collapse of a government in a very large portion of the Eurozone, a.k.a.
France.
Now, that wasn’t entirely unexpected.
There have been rumors swirling about that for a while.
So that probably plays into what we’re seeing out here right now.
Again, going back two weeks now since our last show, we saw V Stocks closing this morning, a little bit shy of 14 and a half.
That puts it down about three and a half points from where it was this time last week.
So a lot of you might have been expecting more juice, more froth given the uncertainty over there in France, but not seeing that play out right now, at least in the raw V Stocks numbers.
Remember, our range for the year, August 5th was our high, a little bit north of 31 and the low, of course, December 15th.
So nigh on a week from now, listeners, we’re supposed to be at our low for the year.
If past is prologue, will we be there again or will all this uncertainty in France and maybe, let’s say farther east in Europe, will that contribute to a little bit more juice out there?
Mr.
Rhodes, it’s been a while.
So we’ve had a chance to get here on the show and talk V stocks.
But what’s been catching your eye out there, sir?
Get the mute disease on the show today.
Well, it’s so loud in my workspace.
I have to behave.
I don’t want to upset everybody else that’s working here.
So what I was saying so eloquently before I realized that I’d left the mute on was, we’ve been talking about that de-ratio spread off and on for some time.
And I did notice a couple of weeks ago that they continue to, as I put it, profits continue to pile up for that guy.
They were down to, they had about 25,000 of these spreads left.
It looks like maybe they got out over the past couple of weeks, had gotten out of a few more.
Initially, they had 49,000 of them.
And the initial cost for this trade was about 17 cents.
And the average credit for getting out has been about 40 cents.
So they’ve done quite well here.
What they did was they sold two of the 15 puts and bought one of the 17 puts back in early September.
And they were even able to get part of that on, I think, for a small credit.
But then they started working out of it in late September and over the course of October and through the middle of November.
The biggest trade last week, this week that’s just behind us, was another exit of, I think, 500 of it.
So a really interesting trade.
Interesting to see such volume using these options so far out.
But they were taking advantage of how elevated volatility was and expect to return to normalcy by December expiration and did well with that.
Looking at the term structure, V stocks is where it should be, which is about $1.50 higher than VIX.
It’s very common.
Typically, V stocks is at a premium to VIX with all the US specific things over the past few months, especially the election.
Those roles have been reversed, but we’re getting back to what we’re used to.
The December contract is at a $2.10 discount to January.
That thing just has continued to widen.
That was already at about a normal $1.50 level a couple of weeks ago.
And the US version was still narrow.
That has widened out to some normalcy as well.
These stocks is doing what you would expect it to do.
It’s at a good premium relative to VIX.
They’re in some contango here.
The January contract’s only at a $0.55 discount to February.
With the big difference between– well, I don’t know if there’s a good opportunity there right now or not, but maybe like to see that widen out a bit more.
So good profits on that D trade and the curves kind of at some normalcy.
Haven’t seen any really interesting new opening transactions, but it’s not really the kind of time of year for that.
And you’ll hear that again in a second when I talk about the weeklies.
Yeah, January, making a scratch our heads in VIX, but even more so out there in V stocks, there’s Jan, where the wild things are these days from a vol trading perspective.
Certainly maybe some interesting opportunities.
We were talking about, as you mentioned, talking about Jan and V stocks on the show a couple of weeks ago.
Perhaps even more intriguing out here this week.
Speaking of intriguing, I had forgotten about this, our chat reminding me that in addition to everything going on with France, we have Romania as they put it, deciding to do a do-over in their election because of Russian interference on TikTok.
Try explaining that to someone 20 years ago.
Yes, I agree.
That is a fun little sentence to say out loud.
Our chat always keeping me on my toes when it comes to all things V stocks.
Mr.
Matt, you and I haven’t had a chance to talk a lot of international vol these days.
So I’m curious to get your perspective, sir.
What’s catching your eye out there in the Euro zone and the land of V stocks these days?
Well, the stocks hit their low November 20th.
Interestingly enough, November 20th, the EU was addressed by Zelensky marking the 1000th day of war in Ukraine.
Since that day and the market has gone up, I think people start to realize that Zelensky is now open to getting out of there.
I think that kind of a relief rally happened and then the V stocks, of course, as we would expect the implied volatility of the European, it just comes straight down since then.
It was higher lows, higher lows, higher lows all year, and now it’s just tanking.
So the volatility is following right along with the rally.
So that’s what I’m seeing out there, Mark.
Yeah, it will be interesting to see Trump did campaign on.
He’ll be able to end the war in Ukraine on day one.
So we’ll see if he can live up to that promise.
It’s a bit of a tall order, a little bit of probably campaign hyperbole in there.
But maybe if we see a cessation of hostilities over there in the East, that could certainly lead to some of that vol getting squeezed out of the Euro zone.
What’s catching your eye out there, really, listeners, in the Euro zone right now and in the V stocks land?
Hit us up.
Let us know as we keep on rolling into the land of all things VIX right now.
And VIX was kind of looking sleepy earlier this week.
Kind of had to kick it to wake it up yesterday.
Today, looking a little bit more responsive.
Thanks mostly looks like to one large print.
We’ll get there in a second.
But right now, listeners, a little over half a million contracts on the tape in VIX land, 541,000 to be precise.
The ADV continues to erode.
Again, it is that seasonally quiet time of year.
So I would be surprised if we were threatening 900,000 or a million contracts a day in VIX right now from an ADV perspective.
So the fact that ADV continues to come in and we’re starting to see some sleepy days, maybe not entirely surprising.
Yesterday was pretty sleepy.
But that said, a general downturn in vol and volume is not exactly unheard of this time of year.
ADV right now in VIX, 785, down another 54,000 from our last show.
So moving in the wrong direction for VIX volume fans out there.
But then again, not entirely unexpected.
How are things shaping up in the top 10?
You know what?
All of you longtime listeners who’ve been waiting, nay, hoping for the day when the puts would dominate our top 10.
Well listeners, today is your day.
Pop your champagne because we’re looking at pretty much all puts all the time out here.
VIX puts in our top 10, only four calls to be found.
It’s been a while since we’ve been that put dominated.
All it took listeners was VIX to plummet since our last show and get down into the low teens for puts to have some interest.
Now the interesting thing about that is usually when we get down to this level, people have taken off those puts because they paid off and maybe they’re starting to reposition for some upside.
But right now we are not seeing that.
We are seeing people looks like pretty much prepared for the quiet holiday malaise of Voll.
Number 10 out there cost you 194,000 contracts to break into the top 10 in VIX land.
So that’s about what we’d expect.
Maybe a little bit lofty.
That gets us to the Dece 18s.
And after that, we got a whole mess of puts.
Number nine, 206,000 of the Jan 17 puts.
Number eight, 210,000 of the Dece 14 half puts.
Number seven, 222,000 of the Dece 16 puts.
Then we got a couple of calls sneaking in there.
Number six, 226,000 of the Dece 20s.
Number five, 242,000 of the Jan 30s.
Then we’re back to more puts.
Listen, there’s number four, 245,000 of the Dece 14 puts.
Number three, 254,000.
So just north of a quarter million of the Dece 15 puts.
Then number two, my favorite position on the board. 39,000 of the Jan 50s.
Now you know if you’ve been listening to the show for a while, that’s part of that ratio vertical in Jan.
So it’s not straight up buying the Jan 50s.
It just brings a smile to my face to see so much size OI on the 50 strike.
And if you’re looking for some downside action listeners, once again this week, topping our list, our old pal, the Dece 13 puts, 408,000 of those bad boys.
So I’m not sure what they’re waiting for to take those off, but they are not taking them off yet.
Listen, as we continue to erode out here in Vaal land and we continue to roll with the show right on into Russell’s Weekly Rundown.
Now, Russell’s Weekly Rundown.
Now, Russell’s Weekly Rundown.
All right, Mr.
Rhodes, you kind of teased us about your weekly trays.
Now the floor is yours, sir.
What you got for us?
You can please available for the last day of this year.
So if you want to, if you’ve got an opinion about VIX and where it’s going to finish, the historical, you know, the very important historical year of 2024 until we get to the next year, you can express that outlook.
And somebody did in a really silly trade.
It looks like a naked sell.
Somebody sold 200 of the DS 30 first 40 calls for a dime each with VIX at 1341.
I don’t know about that, man.
The risk reward, you know what I mean?
I just got some sort of surprise.
Next thing you know, you know, Putin decides to do something between Christmas and New Year’s just to really put everybody on edge.
You don’t necessarily want to be in that position.
Even during an illiquid time in the markets as well.
Do you remember goodness gracious, I think it was 2014, 2015, something like that.
There was a, the last day of the year VIX went up a bunch.
I think it was due to a potential government shutdown or something like that and came right back down the next day.
So I’d hate to be, I’d hate to be in VIX on the short VIX on the last day of the year.
Trade that I kind of like.
I understand it.
This is a strike I don’t think we’ve talked about in some time.
Somebody bought just over 300 on Monday of the DS 24th 12 and a half puts and they paid eight cents for them.
You know, the VIX suffers from all that goofy calendar stuff and these options expire on the open.
I think the 24th is a half day before we’ve got a holiday, before we got a holiday the next day and then we’ve got a holiday the next week and then we have them okay in January as well.
And the three of those will figure into the VIX calculation.
I would not be the least bit surprised if we got a very soft settlement on December 24th.
Now you know, they need it to be below 1242 and we’ll see, we’ll see if we get down there or not.
And on Tuesday, really interesting trade that I don’t like that worked.
I admit if I don’t like something but it did fairly well.
During the day Tuesday and Wednesday was December 4th, somebody bought 1750 of the DS 4th 13 and a half puts.
Now they did them in a whole bunch of lots of 125 and they did them over two different time periods in the day but because of that lot number, I’m going to assume it’s the same trader.
They bought 500 of them at prices between five and six cents and then later in the day they bought 1250 more at 16 cents.
They did not close these out and held them through settlement and the RO on Wednesday morning was 1297.
So these options were worth 53 cents after paying between six cents and 16 cents for them.
So very nice little profit there on buying puts the night before and we’ve seen these in the weeklies every once in a while where it’s an opening trade that’s based on where they think settlement is going to be and so far they seem to– I haven’t kept a track record but they seem to have done fairly well.
There is nothing worth discussing from Wednesday or Thursday period in the weekly space and then today there’s a little bit of activity in the December 11th options but again nothing spread wise, nothing really exciting to talk about.
I didn’t see a single spread using weekly options until today and I just I actually do see one right now.
Somebody is sold the December 11th 17 calls for eight cents and they bought the December 11th 20 calls for six and seven cents each.
That has got to be a closing transaction.
That one doesn’t make sense to me at all but very you know you talked about it being kind of soft with respect to VIX option or VIX futures volume kind of seeing the same thing in the weeklies right now as well.
You know it’s funny you mentioned all this people all this upside in VIX people are selling it kind of reminds me of yesterday we were talking about a trade with the Flowmaster on the option block.
He mentioned someone blasting away I think it was for 20 cents on some calls on a very cheap biotech and you know what happened they got their face ripped off the next day.
It’s doing that kind of thing and VIX kind of in a weird thin part of the year.
Yeah you’re dancing on a razor’s edge there at that point so yeah I’m with you I wouldn’t exactly be be down for those.
We’ll see how those work out as we keep on rolling into this week’s paper as Russell was talking a little bit more paper coming onto the tape in VIX land right now so we’re up to about six hundred and ten thousand contracts so given what we did yesterday it’s actually looking pretty respectable.
The big dog out there today I’m guessing the meatball was looking at these earlier today as well looks like about one hundred and forty thousand now of the Jan 20s have gone up today.
I went and did a little dig in and looks like the bulk of them almost a hundred thirty thousand printed in one block for ninety seven cents paper close to lifting the offer on those doesn’t look like it’s a vertical usually we see that kind of size to the upside we see you know one by four or something else twenty fifty something like that doesn’t seem like there’s anything else against this it has went up straight massive block of the Jan 20s for ninety seven cents so listeners are you down for those nearly a buck for some Jan upside we were just saying how seems like Jan maybe is a little bit juicy that’s kind of reflected in that price there but maybe you like those number two ninety seven thousand of the DS 13 puts those went up on the other side of the spectrum for a dime so which one you like listeners Jan 20s for ninety seven cents or the DS 13 puts for a dime and then number three sixty seven thousand of the DS 14 puts number four thirty nine thousand of the DS 14 halves and number five today thirty thousand of the DS 16 so some calls mix in in their listeners yesterday like we said almost not even worth talking about two hundred eighty six thousand contracts that’s all VIX could muster yesterday the big dog such as it was seventeen thousand of the DS 20s on a closing transaction and that was it number two was twelve thousand of the you know it’s a quiet day when twelve thousand of the March thirty sixes can get for number two March thirty sixes I love these strikes and those are opening as well so somebody opening for a quote unquote size on the March thirty sixes you like that strike listeners let’s just move on from yesterday because not much going on there Wednesday more respectable from a volume perspective pretty much right in line with the ADV 755 on the tape on Wednesday the big dog sixty six thousand of the Jan 20s yet again on wise that seems to be the the strike of the week out there number two fifty one thousand of the Jan 42 half so that’s usually how we see it go up usually part and parcel something else to the upside a number three forty thousand of the DS 14 puts number four thirty six thousand of the Jan 40s four O’s and number five thirty five thousand of the DS 60s interesting I have to go look and see what those DS 60s traded for you want some DS 60s in your hot little hands listeners Tuesday seven or twenty eight thousand on the tape the big dog forty one thousand of the DS 15 calls number two thirty four thousand of the DS 17 is number three thirty three thousand of the DS 20 is number four twenty two K of the DS 13 half puts and rounding out the top five on a decently active Tuesday twenty two thousand as well of the DS 15 puts a Monday kind of decent paper all things considered about six hundred K on the tape on Monday most of that thanks to a massive closing transaction again getting back to what we were talking about here with these Jan 20s these look like they were closing the big dog is actually a Jan 42 half so hundred three thousand of those those were closing looks like against number two forty four thousand of the Jan 20s remember we’ve talked before about the one by four roughly in that ratio to that Jan ups I seem like they were taking a bunch of it off on Monday number three twenty eight thousand of the DS 18 is number four twenty seven thousand of the DS 15 puts and number five twenty five thousand of the DS 17 puts so not the most explosive of weeks Mr.
Meepo I know you’re out there watching all things VIX day after day out here first off you know after we have a lot of closing earlier in the week someone getting the heck out of Dodge on the Jan 20s now we got a massive opening print out there again so maybe the Jan 20s roaring back to life at least a hundred forty thousand times today a lot of them going up for nearly a buck what are your thoughts on that print and what else is catching your eye out there and kind of a quiet week and VIX sir yeah you know it wasn’t the most exciting week but yeah they’ve bought a hundred and forty thousand opening the ball has on that strike has gone up a little bit from from this morning but yeah VIX VIX definitely getting the wrong end of it getting the wrong end of it today outside of that not a ton going on today one second we pulled my time in sales you do have more of these are they selling these thirteen puts or are they buying them I wasn’t sure yeah I couldn’t tell either a dime I kind of was leaning in sale but yeah I don’t know if they’re getting out of Dodge the fourteen puts are trading too that that there’s some volume there might be maybe a little ratio or something maybe they’re lagging into something really nothing on Thursday biggest trade was on the March 36 calls and and after that nothing nothing of any any consequence Wednesday was a little busier you had some Jan action they did the they bought the Jan 42 and a half calls fifty thousand times and yet a Jan 2040 call spread it go up as well and a DS they some DS 20 calls and looks like a some cheap ED 60 calls those are probably some margin so there was that and then we had a couple of different trades yet the on Tuesday at a buyer of the 1522 call spread in December and the 1720 call spread 25,000 times and yet this big March strip March Feb strip go up in in you know like they bought the March 55 50 50 55 60 65 70 75 and the Feb 60 65 70s 85 75 55 and the unit so that that was some sort of you know variance strip that they were hedging something something interesting there and then Monday we had a hundred thousand of the 42 and a half calls go up versus 40,000 of the 20 calls so that was like looks like a ratio spread along the 20 short the 42 and a half that was the biggest trade that was a big until today that was the biggest trade of the week but all pretty slow week as a whole for VIX and volatility yeah I had to check a couple of times make sure our machines weren’t broken yesterday the volume was so anemic Mr.
Matt I know when you’re not chatting with us you keep an eye on all things VIX options what’s catching your eye out there sir yeah it was interesting that that put that 13 14 was a ratio looks like it went like one by two or something there and then on Wednesday there was an interesting trade kind of something near and dear to my heart mark it was selling the 20 buying the 40 let’s see here I’m jumping back and forth and thanks thanks mark Sebastian for explaining I was wondering what are like I see these huge trades going up in the O’Rads dashboard and so I guess it was a stripper you know you just see all these 70s in weird ratios so it sounds like Mark saying it’s some type of a relation to a variance so that yeah that’s interesting that’s the only explanation for something like that is that there’s some over-the-counter trade that they’re hedging off yeah yeah and then on the Wednesday market was selling the the Jan 20 that we saw that they sold that 20,000 times and bought 50,000 of the 42 and a half they did it for a small credit so I love that love that trade so that’s what I look at Mark yeah lots of ratios out here this week as you mentioned that puts looks like those puts were part of a ratio put spread these 1314 today 45 by 30,000 times today they did it net for 33 and a half cents looks like out there so that’s why those puts went up for a dime out there kind of a funky or print it looks like they have a lot of OI on those they could be unwinding some of those but we were just talking size ratio one by two put spreads in VIX or excuse me in V stocks and why don’t we see that more often in VIX well here we go could potentially be closing listeners but something interesting to keep an eye on and of course the ratio upside for days out here in the VIX calls let’s keep rolling out to the vol ETPs listeners to the land of inverse vol as VIX kissing the 30 again now as we’re getting into the latter portion of the show up nearly three points since our last show about 2.9 points volume wise still continuing to get sucked down the drain 2800 contracts on the tape today the ADV is now down to 5000 contracts a day that’s down another 1300 over the last two weeks listeners that’s not good that’s not trending in the right direction I mean they’ve added these weeklies of anything that’s just exacerbated the lack of liquidity out there it’s far more apparent when you look at the weeklies and say wait a minute nickel bid at $2 gee thanks for an at the money option so yeah they need to do something to gin up the volume and liquidity out here in S VIX because it’s continuing to move in the wrong direction it was three four times this not too long ago so something has transpired to really kill the options love out there keeping all things equal out there and inverse lamb you’ve also got S vol at a 2190 up about a tenth of a point from where it was this time last week doing a whopping 75 contracts a day against an ADV of 234 Mark I know you’ve been busy managing that inverse vol newsletter sir challenging times to be doing so what’s been lighting up your tape out there sir in S VIX yeah you know we’re really starting to see these the inverse vol start to show its teeth because you know with the term structure as it’s as it stands vol is you know S VIX has really started to kind of creep up every single day the you know if you do the math on on S VIX it’s picking up about a half percent that’s about 15 cents every day that is obviously really bad for VXX and UVXY and our good friend UVIX that refuses to reverse split any of any of those this is they’re they’re gonna be facing some a real uphill battle to get a pop mr.
Rhodes are you still over right in the upside and S VIX or did you get called away sir side I am gonna tell you what I’m hoping for and then you’ll know exactly how I’m positioned I’m really hoping that S VIX closes at $29.99 I got a couple of couple of short 30s out there but we’ll see what happens this afternoon yeah but it’s you know the volumes just killing me because I would love to be very active in S VIX I really would be but it’s it honestly is becoming more and more difficult to do you know maybe we’ll do a survey and people can tell me what I should start trading instead of S VIX yeah you know I’m with you try to get those off today if we’re vacillating around that 30 strike good luck getting those off for any sort of decent print out here yeah it’s challenging it’s yeah it’s frustrating because it’s an attractive product and just the the spreads make they’re just a killer let’s keep rolling speaking of killing things that you VIX getting killed down to almost the three bucks as of this portion of the show 305 if I rerack it right now it might be at a three handle listener that puts it down about eight tenths of a point from where it was this time last week 14,000 contracts on the tape today it’s not exactly a banger day the ADV only 37,000 down about another 7,000 over the last two weeks on mr.
Rhodes we had that interesting suggestion on our pro Q&A earlier this week about the ratio vertical in you VIX I talked about trying to get it for a credit we were talking about that and kind of workshopping that on the show on Tuesday I’m pleased to say I did get it off for a credit the three three half I think the next morning I was able to get it done so it goes out till next week I’ll talk more about it on oddities and a little bit listeners for all of you listening to oddities but I thought was an intriguing approach so instead of buying your you VIX for the weekend I’m doing that mr.
Rhodes what do you think they’re still experimenting around with that freaking thing and it it’s the simplicity is just been the easiest thing to do which is you know buy it Friday sell it Monday I’d really love to come up with something more clever but I think what ends up happening is is with options if you try to trade in and out of it and you know you VIX is better than than SVIX but still after the weekend if you buy something late Friday and you want to turn around and sell it first thing Monday well first off trying to sell it first thing you probably want to wait a little while for the market to settle in if you that starts growing and lower you’re you know you’re gonna be fighting to get out of the freaking thing so I would I would love it if we could figure out a way to play this with options maybe buy a deep in the money SVIX put instead you have been all over all over the deep in the money puts of late so that’s certainly one way I have been I have been I want to get me get me some get me some Delta well we’ll see I’m not mad about getting that ratio vertical on for a credit again it’s a different way to play kind of the same game out there with not much outlay and you’re not left holding the bag on this potentially massively eroding asset that you’re right mr. meatball they continue to persist in not reverse splitting out there but we will not persist any longer listeners it is time to get to the most difficult dear I say it the most dangerous portion of the show it is time for the crystal ball it’s time to peer into the future and reveal what the volatility gods hold in store it’s time to look into the crystal ball all right everybody let’s get down to business crystal ball time last week on the two weeks ago on the show was myself it was dr.
Vic slash V stocks it was the meatball and it was our buddy Noel there and I’m looking here coming into the end of the show we already said V stocks at a 1448 Vicks cash right now subtly below the 13 handle listeners 1292 now the meatball he was excited earlier in the show he thought he had a crystal ball in the bag at his palindromic nonsense 1331 but we needed a little bit of an uptick to make that one happen or we needed an aggressive sell-off to 1221 if he had gone that way I’m not quite getting any of those so looking right now I was at a 16 double Russell again we were going out two weeks listeners that is a difficult prognostication Russell was at a 1616 a null was at a 14 mark was to the downside of 1331 so mark was the closest but no joy for any of us at a 1292 V stocks I was at an 18 court I thought the ball would persist with all the rumors about France go figure there V stock 1717 for Russell no joy for either of us there at a 1448 so that means mr.
Matt as our guest sir where do you think Vicks said if you want to do V stocks you can I won’t obligate you sir where you think Vicks will be this time next week I think it’s 1350 and then do I need to do V socks too that’s if you’re feeling if you’re feeling frisky by all means sir if not no big deal you’re not gonna do 15 and a half these talks 15 and a half these stocks perfectly reasonable a two-point premium out there let’s see the meatball was actually the closest I can let you go first if you want mr. meatball what are you feeling after my after Matt of course minute I didn’t go with a 1441 on V stocks you did not you went for a 1331 on both I don’t have a V stocks for you from two weeks ago I don’t know I would have gone 1441 so you retroactively legging into the meatball and then you’re legging into palindrome nonsense I’m not sure I’ll have to put that out to the judges but I’m gonna think they’re gonna say no on that when you can’t all heard me say 1440 you can’t retroactively leg into palindrome so after the fact all right well you know so I am looking at next week and there is like legitimately we got CPI next week there is not a lot going on I am call me crazy I think that you’re gonna get the pre X miss pre we have Christmas on Hanukkah on the exact same day this year did you know that they are going to absolutely demolish volatility 1221 1221 for VIX well 1331 for V stocks everyone heard it this time you are locked in for palindromic nonsense on both sir mr.
Rhodes you are next closest sir what are you feeling for this time next week is D I think we drink lower I agree with marks marks thesis but I’m not stuck with the palindromic guesses so I can be a little more flexible what was your number on VIX 1212 50 1250 okay Matt was up in the 15th right he was Matt was 1350 okay well I’m just I want to make sure I wouldn’t step in on his toes and then I’m gonna add a dollar fifty to that because that’s what the spread is right now and I’m gonna do V stocks right at 14 these stocks at 14 not a crazy thing and I can’t I can’t say I wasn’t thinking somewhere in that 12 range as well for myself but that’s what I get for not being close and going last listeners I got to make room for a nice guy that I am nice toast that I am so no no twelve quarter from I could go I could be inverse kind of palindromic I can go 1212 I don’t know if I’m feeling that much let’s go to a little bit north here I’m gonna go 1268 for VIX and then that would put V stocks at pretty close to where Russell’s saying I’m gonna say a little bit lower I’m gonna say 1378 for V stocks that is your market for next week listeners all right everybody that music means we are done for today on the old valve use mr.
Matt you did an able job in the old hot seat this week sir folks want to check out what you and Otto have cooking where should they go what should they do yeah and she and Ozzy told me to do the mute thing so I did that come on over to our ads calm what going on we connected our platform to interactive brokers trainings a breeze and of course a lot of back testing a lot of scanning and some neat stuff that I use to inform me about these beautiful shows and the next show right after this mark yeah if you want more Matt in your life stay tuned if you folks are hanging out in the pro will be back instantaneously in your air holes for a whole bunch of options oddities madness so stay tuned for that in the meantime you can check them out over there in the land of or rats and mr. meatball where should folks go they want more meatball goodness in their lives go to option pit calm and follow me on Twitter at option pit there you go at option pit you can get access to all of his goodness over there at option pit you maybe you want to sling a little inverse vol for yourselves a lot of fun to be had out there these days if you can handle the spreads you check out all the marks goodies over there option pit calm to learn more give them a follow on the old Twitter’s as well at option pit all one word and mr.
Rhodes where should they go if they want more Russell Rhodes in their life just follow me on the Twitter my full name Russell Rhodes anything I’m up to I share it there so that’s the easiest way to track me and if you follow option insider on Twitter all you got to do is look at one of their most recent tweets and I’m tagged right there there you go if you follow us you can easily follow Russell to asses to L’s are H.O.A.D.S. check out his substat some good goodies to be found there as well speaking of finding good goodies listeners you know where to go to keep support in the show has been coming to you for ages public dot com slash V.V. not the worst thing to get paid to trade a little vol at the end of the day while you’re checking things out your ex dot com slash V stocks V.S.T.O.X.X. the place to go to kick the tires and light the fires again keep support in the folks that bring you vol views week after week so we can keep doing the show that’s been coming to you for well over a decade now dare I say it the best vol talk in the business check us out hope you had a good week if you’re on the on demand side that will conclude your broadcast week with us if you’re hanging out in the pro or you’re listening after the fact on the exclusive pro podcast feed guess what you got options oddities coming at you right away so stay tuned for that should be a fun one I’ll be joined by our good pal Mr.
Matt he’s been slinging crazy strangles on that show of late we’ll see what he has up his sleeves for us this week as well as a whole bunch of other fun then of course we’re off for the weekend back again on Monday for the option block all the way through to next Friday another episode of volatility views stay safe out there everybody the international volatility segment is brought to you by your ex home of euro stocks V stocks DAX and the German government bond based eurobund euro bobble euro shots derivatives your ex is the leading European derivatives exchange learn more about trading V stocks futures and options the European volatility benchmark at www dot your ex dot com slash V stocks if you’re paying zero dollars to trade options you’re paying too much that’s because at public dot com you can go a step further and earn rebates on every single contract traded no commissions no per contract fees that’s table stakes when you place an options trade at public dot com you not only don’t pay you earn a rebate and those rebates can add up fast public is the only options trading platform where you can earn rebates you literally won’t find a better deal so switch to public and start getting rebates on every single contract traded or stay with your current options trading platform and leave money on the table the choice is yours public dot com paid for by public investing options not suitable for all investors and carry significant risk full disclosures and podcast description you’re listening to the options insider radio network the home of the options podcast for more quality options programs visit the options insider dot com or search for options insider radio network in your podcast provider of choice listeners can also access all of our programming through our mobile app available on the iTunes and Google Play stores select programs are also available via live stream at mixler dot com slash options dash insider that’s m i x l r dot com slash options dash insider don’t forget to follow along with your favorite programs and submit your own questions for the host set twitter dot com slash options stock twits dot com slash options facebook dot com slash the options insider or via questions at the options insider dot com
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