• Tag Archives VIX
  • VIX Briefly Tops 10 After NYC Pipe Bomb Explosion

    ‘Panic-stricken’ traders briefly pushed VIX above 10 and S&P futures dipped a handful of points after an explosion hit midtown Manhattan…
    However, that dip was bought as the situation was ‘contained’…

    This post was published at Zero Hedge on Dec 11, 2017.

  • These Are The 30 Biggest Risks Facing Markets In 2018

    Once upon a time, Wall Street analysts had just two things to worry about: interest rate risk and corporate profits – virtually everything else was derived from these. Unfortuantely, we now live in the new normal, where central banks step in every time there is even a whiff of an imminent market correction (as BofA explained last week), and the result is that nobody know what is and what isn’t priced into the market any more, simply because the market in the conventional sense of a future discounting mechanism no longer exists (as Citi explained earlier this summer).
    Which is why, paradoxically, even as the VIX slides to record lows, the number of things to worry about on Wall Street grows longer and longer. In fact, according to Deutsche Bank’s Torsten Slok, there are no less than 30 material risks investors should beware in the coming year, ranging from a U. S. equity correction to a reversal of Brexit to Irish presidential elections, to a “Bitcoin crash,” rising inflation, danger from North Korea and results from special counsel Robert Mueller’s probe.

    This post was published at Zero Hedge on Dec 10, 2017.

  • VIX Options Volume Hits Record High As Equity Correlation Flashes Red

    Traders bought and sold an all-time record high 3.15 million VIX options on Friday (as ‘elephants’ and ’50cent’ re-emerged) amid the Ross Rout and North Korean shenanigans.

    This post was published at Zero Hedge on Dec 4, 2017.

  • Volatility Traders Suddenly Scared Of (Stock) Heights?

    Via Dana Lyons’ Tumblr,
    Despite the S&P 500’s jump to new all-time highs, trading in the short-term volatility market is signaling elevated levels of fear.
    We mentioned yesterday that some strange developments were afoot in the stock market lately. Well, the strangeness continued through yesterday’s market action. Today we look at unusual activity in the volatility market – specifically, in the S&P 500 Short-Term Volatility Index, a.k.a., the VXST. Similar to the VIX, the VXST measures volatility expectations over the next 9 days, versus the VIX’s duration of 1 month. And like the VIX, the VXST typically moves counter to the movement of the S&P 500 (SPX). That hasn’t been the case this week.

    This post was published at Zero Hedge on Dec 2, 2017.

  • Flynn Flush Rescues ‘VIX Elephant’ As ’50 Cent’ Backs Up The Truck

    The ‘VIX Elephant’ has awakened. And ’50 Cent’ is back.
    That’s the mysterious-sounding ointroduction to a notable market insight from Bloomberg this mornig as they note the turmoil surrounding Mike Flynn headlines – spiking VIX and slamming stocks – provided two big options market ‘whales’ with some relief and room to move…
    First, the trader who’s known as the Elephant for making big moves in the VIX — but who’s been surprisingly quiet in recent weeks — returned with a vengeance to start December, buying and selling more than 2 million contracts Friday to continue betting on a modest rise in the Cboe Volatility Index. That’s three times the average daily volume for all VIX options.
    The Elephant caught a major break thanks to the sharp retreat in the S&P 500 Index following reports that former national security adviser Michael Flynn would implicate members of President Donald Trump’s transition team in the probe into Russian meddling in the 2016 election. The VIX spiked to as high as 14.58 as equities tumbled.
    Pravit Chintawongvanich, head of derivatives strategy at Macro Risk Advisors, said the investor had been poised to lose $20 million to $30 million on the December leg of this trade before Friday, but was able to escape with a loss of less than $2 million in closing up those positions.
    ‘They got really lucky with the selloff today,’ Chintawongvanich said.
    ‘They were down a lot on the December position, and this allows them to get out of it without too much of a loss.’

    This post was published at Zero Hedge on Dec 1, 2017.

  • 29/11/17: Four Omens of an Incoming Markets Blowout

    Forget Bitcoin (for a second) and look at the real markets.
    Per Goldman Sachs research, current markets valuation for bonds and stocks are out of touch with historical bubbles reality: As it says on the tin,
    ‘A portfolio of 60 percent S&P 500 Index stocks and 40 percent 10-year U. S. Treasuries generated a 7.1 percent inflation-adjusted return since 1985, Goldman calculated — compared with 4.8 percent over the last century. The tech-bubble implosion and global financial crisis were the two taints to the record.’
    Check point 1.
    Now, Check point 2: The markets are already in a complacency stage: ‘The exceptionally low volatility found in the stock market — with the VIX index near the record low it reached in September — could continue. History has featured periods when low volatility lasted more than three years. The current one began in mid-2016.’

    This post was published at True Economics on Nov 29, 2017.

  • Momo Massacred, Semis Slaughtered After Topping 2000 Peak, Nasdaq ‘VIX’ Spikes

    CNBC busily defending the utter bloodbath in semi stocks as nothing to worry about… but this is the biggest plunge for these market darlings since Brexit (June 2016)…

    …and just happens to have occurred as the index finally cleared the 2000 dotcom peak…

    This post was published at Zero Hedge on Nov 29, 2017.

  • US Futures, World Stocks, Bitcoin All Hit Record Highs

    US equity futures continued their push higher into record territory overnight (ES +0.1%), and the VIX is 1.5% lower and back under 10, after yesterday’s blistering surge in US stocks which jumped 1%, the most since Sept. 11, following Powell’s deregulation promise, ahead of today’s 2nd estimate of U. S. Q3 GDP which is expected to be revised up. U. S. Senate Budget Committee sent the tax bull to the full chamber to vote, and on Wednesday Senators are expected to vote to begin debating the bill. It wasn’t just the S&P: MSCI’s all-country world index was at yet another record peak after all four major Wall Street indexes notched up new highs on Tuesday. Finally, completing the trifecta of records, and the biggest mover of the overnight session by far, was bitcoin which topped $10,000 in a buying frenzy which saw it go from $9,000 to $10,000 in one day, and which is on its way to rising above $11,000 just hours later.
    In macro, the dollar steadies as interbank traders and hedge funds fade its rally this week; today’s major event will be testimony by outgoing Fed chair Janet Yellen after Powell said there is no sign of an overheating economy; the euro has rallied on strong German regional inflation while pound surges on Brexit bill deal news; yields on 10-year gilts climb amid broad bond weakness; stocks rise while commodities trade mixed.
    In Asia, equity markets were mixed for a bulk of the session as the early euphoria from the rally in US somewhat petered out as China woes persisted (recovered in the latter stages of trade). ASX 200 (+0.5%) and Nikkei 225 (+0.5%) traded higher. Korea’s KOSPI was cautious following the missile launch from North Korea, while Shanghai Comp. (+0.1%) and Hang Seng (+-0.2%) initially remained dampened on continued deleveraging and regulatory concerns before paring losses into the latter stages of trade. Notably, China’s PPT emerged again with Chinese stock markets rallied in late trade, with the CSI 300 Index of mainly large-cap stocks paring a drop of as much as 1.3% to close 0.1% lower. The Shanghai Composite Index rose 0.1%, swinging up from a 0.8% loss, with property and materials companies among the biggest gainers on the mainland. The Shanghai Stock Exchange Property Index surged 3.8%, the most since August 2016. The Shenzhen Composite Index was little changed, after a 1.2% decline, while the ChiNext gauge retreated 0.4%, paring a 1.5% loss. In Hong Kong, the Hang Seng Index was little changed as of 3 p.m. local time, while the Hang Seng China Enterprises Index fell 0.3%Stocks in Europe gained, following equities from the U. S. to Asia higher as optimism over U. S. tax reform and euro-area economic growth overshadowed concerns about North Korea’s latest missile launch. The Stoxx 600 gained 0.8%, reaching a one-week high and testing its 50-DMA. Germany’s DAX, France’s CAC, Milan and Madrid were all up between 0.5 and 0.7% and MSCI’s all-country world index was at yet another record peak after all four major Wall Street indexes notched up new highs on Tuesday. ‘It seems to me markets are still trading on the theory that the glass is half full,’ said fund manager Hermes’ chief economist Neil Williams.

    This post was published at Zero Hedge on Nov 29, 2017.

  • Did The ‘Short VIX’ Bubble Just Burst?

    If there is one foolproof way to make money in today’s markets, it’s selling any and every blip higher in volatility – in fact it’s so easy a Target manager can do it and make millions. However, something very different happened last week…
    3 of the 4 trading days last week saw SVXY fund outflows with Wednesday the largest single-day outflow in history…
    The Short VIX ETF SVXY, up more than 150% this year amid a slump in equity swings, lost almost $330 million in four days – the biggest weekly outflow in history…

    This post was published at Zero Hedge on Nov 27, 2017.

  • Citi’s Shocking Admission: “There Is A Growing Fear Among Central Bankers They’ve Lost Control”

    Earlier we showed a variation on a VIX chart from Citi’s Hans Lorenzen which, if it doesn’t impress, or scare you, then nothing probably will.
    However, leaving readers unimpressed – and unscared – will not satisfy Lorenzen, which is why the credit strategist who works together with the godfather of rational doom, Matt King, and has been warning for weeks that now is the time to sell credit, unloads in one of the more effusive missives of dripping negativity to hit during this holiday week when one after another equity sellside analyst has been desperate to outgun each other with their ridiculous 2018 year end S&P forecasts.

    This post was published at Zero Hedge on Nov 25, 2017.

  • Muir: “People Are Going To Be Wiped Out” By Short-VIX ETFs

    Back in August, we highlighted a story in the New York Times about a former manager at Target who decided to try day trading with $500,000 he had saved up. Over the following years, he turned that into $13 million by following one simple strategy: Shorting volatility every time it spiked.
    As MacroVoices host Erik Townsend points out, that strategy has worked for many retail investors over the past eight years. And in a brief ‘postgame’ interview with the Macro Tourist Kevin Muir following a longer interview with Francesco Filia, a fund manager at Fasanara Capital, the former explains how many investors don’t understand the risks associated with shorting volatility, as well as the possible repercussions if exchanges and brokerages don’t take the appropriate steps to limit this.
    Townsend begins the discussion by asking Muir about a chart he created of the VXX – the long-VIX ETF – which, because of the low-volatility environement, has repeatedly split leading to unbelievable wealth destruction.

    This post was published at Zero Hedge on Nov 25, 2017.

  • “You Are Here”: Citi’s Stunning VIX Chart

    Something snapped in the VIX complex, seconds after Friday’s early close, sending it to a new record low of 8.56 at 13:00:14 ET…
    … which as we showed yesterday, was less than 10% of the all time VIX high of 89.53, hit on October 24, 2008.
    However, while the Friday VIX snap – which is still on the feeds and thus wasn’t a fat finger error – is yet another indication of just how broken, and/or how overrun by vol sellers the market is, below we present two even more striking, longer-term perspectives on the VIX courtesy of Citi.

    This post was published at Zero Hedge on Nov 25, 2017.

  • The Source Of The Next Crisis

    Authored by Kevin Muir via The Macro Tourist blog,
    In 1992, the CBOE hired Robert Whaley to develop a tradeable volatility product on equity index option prices. A year later, in 1993, the VIX was born when the CBOE started publishing real-time quotes on the implied volatility of the calculated S&P 500 index options. In those early days, I very much doubt Robert ever imagined his volatility index would someday be the cornerstone of some of the world’s most actively traded ETFs. In fact, for the next decade, no VIX instruments traded at all, and it wasn’t until 2004 that the VIX future was listed. And then, it took another five years before the first ETF based on those futures hit the exchanges. But what a ride it’s been.
    Nowadays, everyone knows the VIX index. It’s no longer some arcane index reserved for derivative traders, but instead a highly liquid, easily traded way to bet on future implied volatility. And I doubt most participants realize that last part. They are not betting on current volatility. They are not betting on future volatility. They are betting on future implied volatility. Remember that point. It’s important. We’ll come back to it later.

    This post was published at Zero Hedge on Nov 23, 2017.

  • Pay Down Your Mortgage

    The latest issue of Street Freak came out on Tuesday. Street Freak is a bit of an aggressive stock-picking newsletter, where we come up with a new idea every month. I try to keep the ideas a secret – if you want them, you have to subscribe! But I’m going to let you in on this month’s idea for free. Are you ready? Here it is:
    Pay down your mortgage.
    Yes, that’s a bit unorthodox for a financial newsletter. But people spend too much time thinking about the next get-rich-quick idea and not enough time thinking about their overall financial well-being. I’m willing to bet that in addition to having a successful portfolio, many investors reading this also have a lot of debt.
    Going into what might be a downturn, I’m uncomfortable having a lot of financial leverage. If you think the market is going to go down, then you should stop thinking about buying inverse VIX ETNs and start thinking about how to deleverage in a smart fashion.
    Better Risk-Reward Paying down your mortgage is part of that. It is part of an overall exercise in balance sheet repair, which includes –
    Building a cash position Paying off debt: Margin debt Credit card debt Car loans Mortgage debt

    This post was published at Mauldin Economics on NOVEMBER 16, 2017.

  • Stocks and Precious Metals Charts – The Wild Life

    “You may be sure that no sordid compromises nor carrying of waters on both shoulders will see you through. Those who have the faith had better keep in the state of grace, and those who have neither had better find out what they mean, for in the coming age there will be only one way to stop your trembling knees, and that will be to get down on them and pray. The most important problem in the world today is your soul, for that is what the struggle is about.”
    F. J. Sheen
    “He prompts you what to say, and then listens to you, and praises you, and encourages you. He bids you mount aloft. He shows you how to become as gods. Then he laughs and jokes with you, and gets intimate with you; he takes your hand, and gets his fingers between yours, and grasps them, and then you are his.”
    J. H. Newman, The Times of Antichrist
    Stocks have been showing an interesting pattern, of rolling over and falling in the morning, and then rising again in the afternoon, led by purchasing of the SP futures it appears.
    And gold and silver and the VIX and all other havens and alarms of risk and being tightly capped and suppressed, as is also visible on the charts.
    We will see what the Consumer Price Inflation data has to say about things tomorrow.
    Duc l’Orange will be back, and he promised even more fabulous news of his achievements.

    This post was published at Jesses Crossroads Cafe on 14 NOVEMBER 2017.

  • Hindenburg Omen Sighted As Stocks Suffer First Weekly Loss In 2 Months

    Credit markets to stocks this week…
    Before we start – let’s celebrate. As @BespokeInvest notes, we’re making history today: first 12 month period in the history of the S&P 500 without a 3% drawdown. The VIX is also the lowest on record using a rolling 12 month average.

    This post was published at Zero Hedge on Nov 10, 2017.

  • Short-Volatility Funds Are Being Flooded With Cash (VIX Evaporating)

    The SPX volatility index VIX is near an all-time low as The Federal Reserve attempts to raise their target rate and unwind their $4.46 trillion balance sheet. The question remains as to how further rate increases and balance sheet unwinding will impact equity volatility.
    (Bloomberg) Exchange-trade products betting that volatility will sink lower have never been more popular.
    Even as the CBOE Volatility Index plunges to its lowest on record and U. S. stocks march to fresh highs, investors have continued to give the short-volatility trade their vote of confidence this year. With $2.4 billion in assets, short volatility exchange-traded funds are backed by the most cash on record, according to data compiled by Bloomberg.

    This post was published at Wall Street Examiner on November 7, 2017.

  • ‘Party Like It’s 1999’ (or 2008 or 1987 or 1929)

    To paraphrase the highly regarded fund manager and notable bear, John Hussman, you can look like an idiot before a Bubble pops or after it’s popped.
    I guess I’m squarely in the camp of looking like an idiot before the bubble pops. I might watch ‘The Big Short Again’ for some ‘moral fortitude.’ With history’s stamp of approval on my side, all I can do is shake my head and chuckle. As soon as the Dow crossed over 23,000 on Wednesday, the ‘experts’ on bubblevision began speculating how long it would take for the Dow to hit 24k. I was actively trading and shorting dot.com stocks in late 1999 and the curent environment feels almost exactly like it felt then. Wake up everyday and wait for Maria Bartiromo to breath the name of a dot.com stock you were short and watch it spike up 10-20% on her signal. The Nasdaq ran from 2,966 to 4,698 – 1,700 pts or 58% – in 4 months. It was painful holding shorts but very rewarding after the brief period of ‘suffocation.’
    It feels like the market could go into a final parabolic lift-off to its final peak before the inevitable. The non-commericial (i.e. retail) short-interest in the VIX – meaning retail investors are ‘selling’ volatility – hit another all-time high this past week. This a massive and reckless bet against any possibility of any abrupt downside in the market. It reflects unbridled hubris. Don’t forget, smart money and banks are taking the other side of this bet.

    This post was published at Investment Research Dynamics on October 25, 2017.

  • What Selloff: Futures Rebound, Nikkei Extends Record Winning Streak

    European shares are modestly lower as investors monitor tense events in Spain and as focus turns to Thursday’s ECB meeting; US equity futures have rebounded from yesterday’s sharp but shallow selloff and are in the green amid rising odds of U. S. tax reform and the imminent unveiling of the next Fed chair while Asian shares rise and Japan extends its winning streak to a record 16 days. The euro edged higher after data showed Europe’s economy is maintaining momentum, while the USDJPY managed to recover all of yesterday’s sharp losses.
    The MSCI’s 47-country world share index stayed near all-time highs after a drop in General Electric shares on Wall Street had seen the ViX volatility index spike up, however that move has been largely faded since.
    Overnight currency moves were mostly contained, but the greenback strengthened against most peers and U. S. equity futures edged higher amid continued speculation over who will lead the Federal Reserve, and as optimism over tax reform proved resilient. “There is some support building for Donald Trump’s tax reforms,’ Ipek Ozkardeskaya, an analyst at London Capital Group, told Bloomberg by email. News reports suggest ‘that fiscal hawks may be willing to disregard deficit spending to allow Trump to go ahead with his tax cut plans to boost growth. If approved, the fiscal reforms will cost an arm to the government, but on the other hand, it is important for the congress to achieve some progress before the end of the year in order to restore confidence.”

    This post was published at Zero Hedge on Oct 24, 2017.