Volmageddon 2.0 - one for the playbook.
February 2018 was Volmageddon. The thought passed around as a narrative was that leveraged volatility buyers created the spike as a short cover. Here is my narrative then and now:
US markets closed down. Rhe world indices followed and neatly rolled around to the US open with all markets - absent a few outliers like Columbia - down. All futures were trading down except, logically VIX futures. All commodities were down across the board. Premarket saw UVXY spike to 18 and in that session UVXY went to $38. Some move. Now lets compare that to yesterday.
Almost all markets were down. Gold, metals, softs and financial futures were down. VIX was up. US futures all were down and VIX futures up. Mini-Volmageddon.
When this happens it outside of my usual entry at 2XATR for a long call position in any market. Volatility really is different and leveraged volatility occasionally gives a years gain in one day.
I just buy at the market calls that are short dated and at or just out of the money at the open. UVXY is correlated to VIX .VIX broke into the 20s and UVXY broke above $35. I call it Volmageddon 2.0 when the world goes to sleep nervous and wakes up nervous - you decide why.
This scenario is in my playbook. I look for it.
US markets closed down. Rhe world indices followed and neatly rolled around to the US open with all markets - absent a few outliers like Columbia - down. All futures were trading down except, logically VIX futures. All commodities were down across the board. Premarket saw UVXY spike to 18 and in that session UVXY went to $38. Some move. Now lets compare that to yesterday.
Almost all markets were down. Gold, metals, softs and financial futures were down. VIX was up. US futures all were down and VIX futures up. Mini-Volmageddon.
When this happens it outside of my usual entry at 2XATR for a long call position in any market. Volatility really is different and leveraged volatility occasionally gives a years gain in one day.
I just buy at the market calls that are short dated and at or just out of the money at the open. UVXY is correlated to VIX .VIX broke into the 20s and UVXY broke above $35. I call it Volmageddon 2.0 when the world goes to sleep nervous and wakes up nervous - you decide why.
This scenario is in my playbook. I look for it.
Comment:
leveraged volatility SELLERS - typo.