Quote:
Originally Posted by 2000cs
This is my problem with the VIX. It is a backwards volatility measure so it really doesn’t predict; and it is very sensitive to market shocks. While the big shocks of yesterday and today technically increase volatility, in reality what is intended is a sense of ongoing swings and not spikes and shocks (unless they become the norm).
So I’d be ignoring VIX for a few sessions; or maybe trade on the assumption it will fall pretty quickly back to 20ish.
Options pricing also might be a bit skewed by this, so it could be a good time to write covered calls - if you believe the stocks won’t bounce back.
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What do you mean it's backward volatility? I'm not following that. My only point was that when the Vix is >40 it normally doesn't stay there for long and is pretty much always a sign of a huge bounce very soon.
If Trump does nothing this weekend, the market is going to tank again on Monday. The S&P recession levels are around 4400 (16x) earnings. We may not hit 4400 but that's the bottom