Category: Volatility

Picking Up Nickels

If you saw a nickel on the ground, would you pick it up? Would your answer change if it was a $1 bill? How about a bag of $100 bills? Thus far in 2017, short volatility traders have been picking up the equivalent of industrial-sized garbage bags filled with $100 bills. In shorting equity volatility […]

The Nasdaq 100 ETF is in the midst of its longest uptrend in history: 138 consecutive trading days above its 50-day moving average. On CBNC today (click here to view) I discussed a number of factors that are signaling a potential end to this historic run (click here for my recent post on gray skies). […]

Welcome to the Casino

Last week we learned how to lose 40% in a day using ETFs. Abridged version: combine leverage with high volatility asset classes… This was of course a tongue-and-cheek exercise. No one buys such things with the goal of losing 40% in a day – they buy with the goal of making that much. And not […]

Volatility Spiked. Now What?

Well, that didn’t take long. 1) Is Shorting Volatility a Free Lunch? 2) What Happens When Volatility Rises? These were the titles of my last two posts. And today both questions were answered in extreme fashion. The Volatility Index (VIX) rose 46%, the 7th largest 1-day spike in history. The S&P 500 declined 1.8%, its […]

May you live in uninteresting times. Market volatility has become a thing of the past. To wit, the S&P 500 (over the past 15 trading days) is trading in its narrowest range in history. The VIX, the so-called “Fear Index,” is lower than 99% of historical readings. What are investors afraid of these days? You […]