Category: Volatility

The Year Volatility Died

When it comes to market volatility, how low is low? Before 2017, a close below 10 in the Volatility Index (VIX) was an extremely a rare event. It had only happened 9 times since 1990 out of 6,804 trading days. This is equivalent to 1 day every 3 years, or 0.13% of the time. A […]

“October: This is one of the peculiarly dangerous months to speculate on stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.” – Mark Twain The words “dangerous” and “stocks” used to be synonymous. That equities were a risky investment was a given. All that seems to have changed. […]

Take a look at the following chart. What is your inclination: long or short? If you said short, you’re in large company, for shorting volatility is in vogue like never before. And this particular product, which uses 2x leverage in going long volatility (ticker: TVIX), has been a favorite among short sellers. Why? Because it […]

 “Markets don’t crash from all-time highs.” This old saying is making the rounds again. Why? The Dow just closed at an all-time high for the 8th consecutive trading day and 34th time in 2017. That’s a lot of all-time highs, and it comes after the 122 all-time highs in 2013-2016. We haven’t seen this many […]

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 […]