Why 2% Felt Like Nothing
By Brandon Chapman, CMT
Hey trader,
Institutions are so heavily hedged right now that a 2% decline in the S&P 500 is background noise.
The market sold off 2% yesterday. The VIX barely moved.
The SKEW index climbed to 143, confirming that desks added even more downside protection into the decline.
That disconnect between implied volatility and actual market movement is not sustainable. Either realized volatility catches up to the VIX, or the VIX collapses.
The Block Hunter Console flagged 35,000 call contracts on Microsoft in a single print during today's session.
Someone is positioning for the second scenario…
The VIX is overstating the movement we are seeing in the S&P 500. I'm going to show you the metrics that prove it.
Then we'll dig into what SKEW at 143 reveals about how aggressively institutions are still adding hedges.
And the 35,000-contract Microsoft print tells you exactly how one desk expects this tension to resolve
Click Here to Continue reading.
The VIX is pricing daily swings the S&P 500 has not delivered.
Institutions are so hedged that a 2% decline barely registers. That gap resolves one of two ways, and the Console caught 35,000 contracts betting on the direction.
Most traders see the VIX at 29 and assume the market is afraid. The Block Hunter Console caught the moment an institution decided to trade the other side of that fear, with 35,000 contracts of defined-risk bullish exposure on Microsoft.
The Console lit up opportunities on KSS (375% in 13 days), PLUG (206% in 5 days), and VFC (100% in just 24 hours).
Join me Monday at 2PM EST when I dive into the newest opportunities from the Block Hunter Console.
Click Here To Reserve Your Spot
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