Our Blog

Option Pit Morning Vol Report 2-28-18:  The Man Crushes SVXY Vol

Option Pit Morning Vol Report 2-27-18:  SPX rallies and VIX drops

Option Pit Morning Vol Report 2-26-18:  SPX rallies and VIX drops

Option Pit Trade Idea of the Week 02.23.2018 CAT Calls

Option Pit Vol Report: 02.23-2018 Will today be like the others? SPX TLT VIX

Option Pit Vol Report: 02.22-2018 When will Vol Fatigue set in? SPX TLT VIX

Option Pit Vol Report: 2-21-2018

Option Pit Vol Report: 2-20-2018

Option Pit Trade Idea of the Week:  CBOE

Option Pit Vol Report 2-16-18 Will VIX go flat?:

Option Pit Vol Report 2-15-18:

Option Pit Vol Report 2-14-18:  They Love to Sell Vol

Option Pit Vol Report 2-13-18

Option Pit Vol Report 2-9-18  Markets Are Volatile!

Option Pit Vol Report 2-8-18  VXX Trading Funky, SPX Not Holding Bid

Option Pit Chat Wrap 02.07.2018  VIX Down?

Option Pit Webinar 02.06.2018 Making Sense of VIX & VIX ETPs

Option Pit Vol Report 02.06.2018  VIX Blow Up

Option Pit Vol Report 02.05.2018

Trade Idea of the Week 02.02.2018 IWM

Option Pit Vol Report 02.02.2018 Treasury Rout Worries Stocks

Option Pit Vol Report 02.01.2018 VIX in the 12's?  10's?

Option Pit Vol Report 01.31.2018

Option Pit Vol Report 01.30.2018 CBOE down and VIX up, ha!

Option Pit Vol Report 01.29.2018

Option Pit Trade Idea of the Week: 01.26.2018  XOM

Option Pit Morning Vol Report: 01.25.2018  When Does VIX Give It Up?

Option Pit Morning Vol Report: 01.25.2018  When Does VIX Give It Up?

Option Pit Morning Vol Report: 01.24.2018  SPX Squeeze

Option Pit Morning Vol Report: 01.23.2018  VIX is Sticky

Option Pit Morning Vol Report: 01.22.2018  Shutdown Shutout

Trade Idea of the Week: 01.19.2018  MSFT

Option Pit Morning Vol Report: 01.19.2018  The Shut Shutdown

Option Pit Morning Vol Report: 01.18.2018  VIX Backward Short Term Again with Bank Vol Cheap

Option Pit Morning Vol Report: 01.17.2018  VIX Backward Short Term as Shut Down Rules

Option Pit Morning Vol Report: 01.16.2018  SPX Up VIX Up

Trade Idea of the Week: 01.12.2018  TLT Calls

 The promotion for Mark's new book 'Trading Options for Edge' will end next week.  You can buy it for under 30.00 by clicking here.  Send us the receipt and Mark will send you a gift.

Option Pit Morning Vol Report: 01.12.2018  SPX Gamma

Option Pit Morning Vol Report: 01.11.2018 SPX All Time Highs, Will it Keep Going?

Option Pit Morning Vol Report: 01.10.2018 Will Chinese Stop Buying Bonds?

Option Pit Morning Vol Report: 01.09.2018 Will Semis bounce?

Option Pit Morning Vol Report: 01.08.2018 FB to $190 then $200

Option Pit Idea of the Week: Intel 1-5-18

Option Pit Volatility Report 1-5-18

Option Pit Volatility Report 1-4-18

VIX Headfakes into the New Year

by Andrew Giovinazzi 01.02.2017

Happy New Year to all the Option Pit faithful!  We started off with more of what we saw last year; the inability of VIX to hold a spike and then yet another rally.  Not so long ago naysayers thought we would never see the highs again in the NASDAQ and yet it pushed through 7000 today for an all-time high.  Whatever VIX thought was going to happen, it was right, just not in the direction implied by the sharp rally.

LivevolX for Lightspeed

 

That gives us the rub for 2018.  If the lower VIX persists with the crazy rallies the trade for 2018 will be mid-to-long term LONG gamma.  It is not a normal trade because low vol and crazy rallies happen once in a decade.  We are due for another one.

The Trade

Going into earnings, we should see a stronger NDX or SPX.  VIX could hedge since the only thing stopping this market is the unknown unknown.  If you like this kind of pair setup, look for our new vol newsletter coming soon.

Positions in VIX, SPX for Karman Line Capital, LLC.

Follow Mark@optionpit

Follow Andrew@optionvol

Option Pit Morning Vol Report: 01.02.2017 Commodities like 2018

Option Pit Trade Idea of the Week:  CME Group 12-29-17

Option Pit Vol Report 12-29-17

Commodities Jump into 2018

Option Pit Vol Report 12-28-17

Slowing BTC Hype Slowing CBOE & CME

Option Pit Vol Report 12-27-17

Option Pit Vol Report 12-26-17

Option Pit Trade Idea of the Week:  PZZA

Take a look at the Option Pit Trade Idea of the Week for our Christmas Special

Buy Gold for 15% off  Use Code XMASGOLD and

Click Here

Option Pit Vol Report 12-22-17

All Thinks Bitcoin Having a Bad Day

Option Pit Vol Report 12-21-17

Will the Back Slapping Send Stocks Higher?

Option Pit Vol Report 12-20-17

Sell the News?

Will They or Won't They? by Andrew Giovinazzi 12-19-17

 

For the most part today was a sleeper.  Most everything sold off after tremendous runs to all –time highs in SPX and NDX yesterday.  You know things are nuts when TWTR, yes I bought more juice in there last week, is the market leader for a day.  Much of the action in VIX this year, when there was any, has been around politics.  DJT seems to keep the volatility around himself and somehow it does not translate to equities except on Russia news snippets.  The month of December has been ruled by Congress and I predict that is how the month will end.

VIX futures kept a bid most of the day after aggressively selling off Friday and Monday.  Today the bid was in the cash as traders ignored Xmas and New Year’s by putting some juice back in the SPX.  Most of that was absorbed by the Jan future.  I get more cautious when the futures lift with the cash but we did not get that today.  Our Chat Room mentors pointed out that TLT had a bad day and most likely that is the death knell for VIX into the New Year.  We are still poised at 10 VIX and ask the question will they or won’t they?  Never thought I would say 10 VIX is high.

 

www.vixcentral.com

If the Tax Bill passes, I predict a VIX close under 9 for 2017 to cap off a low vol year.  There is a trade for that.  If it fails, we are down 3% VIX is 17.  There is not much in the between.

The Trade

Very short term VIX calls, as in next week, for the upside.  Quarter ending long at the money UVXY puts against might work.  Look for our Vol Newsletter coming soon on Hedged Volatility Swing Trading.  It is a learned skill.

Disclosure- UVXY, VXX, VIX, SPX positions in Karman Line Capital LLC

Follow Mark@optionpit

Follow Andrew@optionvol

 

 

Option Pit Vol Report 12-19-17

VIX Catches a Bid

Bitcoin Mania by Andrew Giovinazzi 12-18-17

At this point there seems to be a lot of ink devoted to Bitcoin.  The 1000% gain this year, the catastrophic drop it might have and last but not least the Bitcoin futures traded on the CBOE and CME.  The last point is really what I want to discuss because we most likely would not have had a financial crisis in 2008 if the OTC derivative market in Sub Prime mortgages was exchange cleared.  Somewhere along the line margin requirement would have gone way, way up which would have started to cool things.

 

Data from:  http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures

Right now if someone wants a Bitcoin they can mine it, buy it on the many secondary exchanges or buy  a future.  The 1st one requires computing power and the other two just need cash.  A lot of cash at the just under $19,000 last.  The trouble will come when and if the product gets highly margined.  The Financial Crisis had a lot of banks leveraging a balance sheet to buy AAA rated securities that were somewhat less than that. The not knowing what anything was worse which made a bad situation worse back then.  We have not seen the next iteration of Bitcoin leverage but don’t underestimate the creativity of Wall Street if they can make a buck or two.  Should we short swaps on funds that invest in XBT?  Let the games begin.

Right now the mostly cash nature of Bitcoin is not a problem, systemically, but if we start to see leveraged products coming, things could get a little wild.  The listing of futures has put a slight damper on the volatility of BTC, but only slight.  I would expect to see options on futures in Q2 2018.  100% realized vol on a $19,000 should be exciting enough.

Disclosure:  sadly no BTC

Follow Mark@optionpit

Follow Andrew@optionvol

Option Pit Morning Vol Report 2-27-18:  SPX rallies and VIX drops

Option Pit Morning Vol Report 2-26-18:  SPX rallies and VIX drops

Option Pit Trade Idea of the Week 02.23.2018 CAT Calls

Option Pit Vol Report: 02.23-2018 Will today be like the others? SPX TLT VIX

Option Pit Vol Report: 02.22-2018 When will Vol Fatigue set in? SPX TLT VIX

Option Pit Vol Report: 2-21-2018

Option Pit Vol Report: 2-20-2018

Option Pit Trade Idea of the Week:  CBOE

Option Pit Vol Report 2-16-18 Will VIX go flat?:

Option Pit Vol Report 2-15-18:

Option Pit Vol Report 2-14-18:  They Love to Sell Vol

Option Pit Vol Report 2-13-18

Option Pit Vol Report 2-9-18  Markets Are Volatile!

Option Pit Vol Report 2-8-18  VXX Trading Funky, SPX Not Holding Bid

Option Pit Chat Wrap 02.07.2018  VIX Down?

Option Pit Webinar 02.06.2018 Making Sense of VIX & VIX ETPs

Option Pit Vol Report 02.06.2018  VIX Blow Up

Option Pit Vol Report 02.05.2018

Trade Idea of the Week 02.02.2018 IWM

Option Pit Vol Report 02.02.2018 Treasury Rout Worries Stocks

Option Pit Vol Report 02.01.2018 VIX in the 12's?  10's?

Option Pit Vol Report 01.31.2018

Option Pit Vol Report 01.30.2018 CBOE down and VIX up, ha!

Option Pit Vol Report 01.29.2018

Option Pit Trade Idea of the Week: 01.26.2018  XOM

Option Pit Morning Vol Report: 01.25.2018  When Does VIX Give It Up?

Option Pit Morning Vol Report: 01.25.2018  When Does VIX Give It Up?

Option Pit Morning Vol Report: 01.24.2018  SPX Squeeze

Option Pit Morning Vol Report: 01.23.2018  VIX is Sticky

Option Pit Morning Vol Report: 01.22.2018  Shutdown Shutout

Trade Idea of the Week: 01.19.2018  MSFT

Option Pit Morning Vol Report: 01.19.2018  The Shut Shutdown

Option Pit Morning Vol Report: 01.18.2018  VIX Backward Short Term Again with Bank Vol Cheap

Option Pit Morning Vol Report: 01.17.2018  VIX Backward Short Term as Shut Down Rules

Option Pit Morning Vol Report: 01.16.2018  SPX Up VIX Up

Trade Idea of the Week: 01.12.2018  TLT Calls

 The promotion for Mark's new book 'Trading Options for Edge' will end next week.  You can buy it for under 30.00 by clicking here.  Send us the receipt and Mark will send you a gift.

Option Pit Morning Vol Report: 01.12.2018  SPX Gamma

Option Pit Morning Vol Report: 01.11.2018 SPX All Time Highs, Will it Keep Going?

Option Pit Morning Vol Report: 01.10.2018 Will Chinese Stop Buying Bonds?

Option Pit Morning Vol Report: 01.09.2018 Will Semis bounce?

Option Pit Morning Vol Report: 01.08.2018 FB to $190 then $200

Option Pit Idea of the Week: Intel 1-5-18

Option Pit Volatility Report 1-5-18

Option Pit Volatility Report 1-4-18

VIX Headfakes into the New Year

by Andrew Giovinazzi 01.02.2017

Happy New Year to all the Option Pit faithful!  We started off with more of what we saw last year; the inability of VIX to hold a spike and then yet another rally.  Not so long ago naysayers thought we would never see the highs again in the NASDAQ and yet it pushed through 7000 today for an all-time high.  Whatever VIX thought was going to happen, it was right, just not in the direction implied by the sharp rally.

LivevolX for Lightspeed

 

That gives us the rub for 2018.  If the lower VIX persists with the crazy rallies the trade for 2018 will be mid-to-long term LONG gamma.  It is not a normal trade because low vol and crazy rallies happen once in a decade.  We are due for another one.

The Trade

Going into earnings, we should see a stronger NDX or SPX.  VIX could hedge since the only thing stopping this market is the unknown unknown.  If you like this kind of pair setup, look for our new vol newsletter coming soon.

Positions in VIX, SPX for Karman Line Capital, LLC.

Follow Mark@optionpit

Follow Andrew@optionvol

Option Pit Morning Vol Report: 01.02.2017 Commodities like 2018

Option Pit Trade Idea of the Week:  CME Group 12-29-17

Option Pit Vol Report 12-29-17

Commodities Jump into 2018

Option Pit Vol Report 12-28-17

Slowing BTC Hype Slowing CBOE & CME

Option Pit Vol Report 12-27-17

Option Pit Vol Report 12-26-17

Option Pit Trade Idea of the Week:  PZZA

Take a look at the Option Pit Trade Idea of the Week for our Christmas Special

Buy Gold for 15% off  Use Code XMASGOLD and

Click Here

Will They or Won't They? by Andrew Giovinazzi 12-19-17

 

For the most part today was a sleeper.  Most everything sold off after tremendous runs to all –time highs in SPX and NDX yesterday.  You know things are nuts when TWTR, yes I bought more juice in there last week, is the market leader for a day.  Much of the action in VIX this year, when there was any, has been around politics.  DJT seems to keep the volatility around himself and somehow it does not translate to equities except on Russia news snippets.  The month of December has been ruled by Congress and I predict that is how the month will end.

VIX futures kept a bid most of the day after aggressively selling off Friday and Monday.  Today the bid was in the cash as traders ignored Xmas and New Year’s by putting some juice back in the SPX.  Most of that was absorbed by the Jan future.  I get more cautious when the futures lift with the cash but we did not get that today.  Our Chat Room mentors pointed out that TLT had a bad day and most likely that is the death knell for VIX into the New Year.  We are still poised at 10 VIX and ask the question will they or won’t they?  Never thought I would say 10 VIX is high.

 

www.vixcentral.com

If the Tax Bill passes, I predict a VIX close under 9 for 2017 to cap off a low vol year.  There is a trade for that.  If it fails, we are down 3% VIX is 17.  There is not much in the between.

The Trade

Very short term VIX calls, as in next week, for the upside.  Quarter ending long at the money UVXY puts against might work.  Look for our Vol Newsletter coming soon on Hedged Volatility Swing Trading.  It is a learned skill.

Disclosure- UVXY, VXX, VIX, SPX positions in Karman Line Capital LLC

Follow Mark@optionpit

Follow Andrew@optionvol

 

 

Bitcoin Mania by Andrew Giovinazzi 12-18-17

At this point there seems to be a lot of ink devoted to Bitcoin.  The 1000% gain this year, the catastrophic drop it might have and last but not least the Bitcoin futures traded on the CBOE and CME.  The last point is really what I want to discuss because we most likely would not have had a financial crisis in 2008 if the OTC derivative market in Sub Prime mortgages was exchange cleared.  Somewhere along the line margin requirement would have gone way, way up which would have started to cool things.

 

Data from:  http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures

Right now if someone wants a Bitcoin they can mine it, buy it on the many secondary exchanges or buy  a future.  The 1st one requires computing power and the other two just need cash.  A lot of cash at the just under $19,000 last.  The trouble will come when and if the product gets highly margined.  The Financial Crisis had a lot of banks leveraging a balance sheet to buy AAA rated securities that were somewhat less than that. The not knowing what anything was worse which made a bad situation worse back then.  We have not seen the next iteration of Bitcoin leverage but don’t underestimate the creativity of Wall Street if they can make a buck or two.  Should we short swaps on funds that invest in XBT?  Let the games begin.

Right now the mostly cash nature of Bitcoin is not a problem, systemically, but if we start to see leveraged products coming, things could get a little wild.  The listing of futures has put a slight damper on the volatility of BTC, but only slight.  I would expect to see options on futures in Q2 2018.  100% realized vol on a $19,000 should be exciting enough.

Disclosure:  sadly no BTC

Follow Mark@optionpit

Follow Andrew@optionvol

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