One of the trickier things to do is to evaluate risk premium ahead of a market event.

Option traders, I was a quite a bit wrong last week.

There was quite an interesting development in the volatility yesterday. This is one of these days where close-close or open-open volatility misses all of the action, this is part of the reason I pay a lot of attention to range volatility.

Yesterday was an interesting day for the volatility complex. While the SPX enjoyed a huge up day yesterday in anticipation of a vote of confidence for the current Greek government, I could feel the trading tension.

Since the market had its 30 point sell off at the beginning of the month, many of my option mentoring students have lamented how poorly the VIX has correlated with the fall in the market place.

I do not think anyone would call yesterday a fearful session on any level. The fact that nothing happened, and SPX IV remained essentially unchanged should be considered a slightly bullish sign for volatility.

The VIX may have gained a little more than 1%, something those in the media will point toward as an increase in fear. As I look at volatility I do not seem much of an uptick at all.

The VIX did something totally unexpected yesterday…It acted like It is SUPPOSED TO!!!

As I have stated several times, I continue to be shocked by the brazen put selling that continues to go on. I am not sure where it stops.