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Thread: Can anyone interpret this chart for me?

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    Default Can anyone interpret this chart for me?

    http://www.schaeffersresearch.com/st...quity_vix.aspx

    The market was hitting new highs last Friday, but the SPX volatility was way up. Thank you.

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    Default Re: Can anyone interpret this chart for me?

    The VIX has been proven time and again to not give reliable trading signals.

    Although it is commonly know as a "fear" indicator, it's numerical value is determined by the put:call ratio. Lotta different reasons why there might be more puts traded on friday. Some bulls may unwilling to buy long calls, so they sold naked puts (also a bullish strategy) or sold a bull put spread (I did!) instead. That would increase the number of puts versus calls, but would still indicate a bull market.
    Rebecca Avalon







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    Default Re: Can anyone interpret this chart for me?

    Actually, I sold puts on the vix itself about 2 weeks ago, I fully expect at least one big down day between now and expiration day. Even with market direction working AGAINST ME in this trade, the time decay has made this a favorable trade and all I need is one big down day for the vix to spike so I can buy it back for profit.
    Rebecca Avalon







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    Default Re: Can anyone interpret this chart for me?

    The VIX has been proven time and again to not give reliable trading signals.
    agreed ... and it's also skewed by volume

    If you want to draw conclusions based on put:call ratio, a far more reliable indicator is the Commitment of Traders on the futures exchanges. The CBOT reports put:call ratio on futures of US Treasuries, Dow Jones, Interest Rates, Gold etc. as well as other indexes and commodities

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    Default Re: Can anyone interpret this chart for me?

    Also it's earning's season which means "fear" is going to be higher
    Rebecca Avalon







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    Default Re: Can anyone interpret this chart for me?

    Vix options are European style. I can't deal with that. I just end up losing.

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    Default Re: Can anyone interpret this chart for me?

    I prefer European Style....I don't have anything put to me or get called out before expiration. You can still trade in and out of them on a daily basis.
    Rebecca Avalon







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