The VIX says calm but the options on the S&P say something else.
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The VIX closed Friday in the 14s. |
Any student of the fear gauge will tell you that’s calm. |
But I don’t believe it, and when you dig into it, it’s rather frightening. |
The short-dated options on the S&P are pricing a $108 move for next week, up from $98. |
Volatility got marked up about 10% while the VIX sat still. And this week's $98 expected move? The index hit it to the penny. |
Next week brings ADP, the jobs report, inflation data and GDP. |
I said on Friday's video I'll take the over on that $108. I expect it to hit midweek, when the tape turns violent. |
A trader who buys a cheap call or put into that and sets a stop-loss for "protection" is about to learn what a stop does on a gap. |
They become roadkill. |
However, there’s a smarter way to play it. |
Shortly I’ll share with you what that is, and four other things that will not only help you make better decisions but also set you up for success in what is about to become a WILD market. |
Read it before futures open Sunday night. |
Show me the smarter way to play it |
To your success,
Don Kaufman |
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