Volatility Views 44: Listener Mail Extravaganza
Volatility Views 44: Listener Mail Extravaganza
Volatility Review: Vol is down and SPX is up. Even the news of the newiPad wasn't enough to boost the market. Don opines on Apple. Nasdaq volstill flat-lined. Euro vol -- the 1-month and 3-month March contractsexpire soon.
Listener Mail: Nasdaq VolContracts, TVIX, the nature of VolContracts, and avoiding the VIX.
1. Will the new Nasdaq VolContracts be exclusive to the Nasdaq, like the Euro and CME, or multi-listed?
2. What's your take on the ongoing TVIX drama? Cause? Was it shady? Is TVIX done?
3. I'm new to the show, so I apologize if you guys have discussed thisin earlier episodes, but I'm intrigued by the concept of VolContractsand how they work. Would the new Nasdaq products be normal futures andoptions in the truest sense? In other words, do normal strategies suchas verticals, time spreads, etc. apply in VolContracts products? Or, doI need to relearn my trading fundamentals and apply some new conceptsto fully capitalize on these instruments?
4. I hear you guys talking about the problems with using VIX as a proxyfor SPX volatility: Poor settlement, too many masters affecting theVIX, etc. So instead of VIX, I'm thinking of getting a pure realizedvol position using delta-neutral ATM straddles in SPY. The contractsize is smaller, so it's easier for me to trade. As long as I make myhedges and adjustments accurately, this should be a vastly superior proxy for the true S&P volatility. Am I correct or am I nuts?
Crystal Ball: Non-farms may be a non-event. Load up on VIX downside. Hopefully the Nasdaq vol can break out of this flat line and the othershoe will drop. Otherwise it's difficult to make any predictions.
"
About Mark S. Longo
Mark S. Longo is the founder of The Options Insider Inc. - a firm dedicated to providing free options information, education, news and analysis for options users. Whether it's on TheOptionsInsider.com, a leading online options destination; through Options Insider Radio, the world's only radio network for options users; or through a growing number of newsletters and live events, Mr. Longo continues to provide new ways to spread the word about options.Mr. Longo's analysis of the options market has appeared in a wide variety of domestic and international publications, including The Wall Street Journal, Financial Times, Reuters, Futures Magazine, and more. As one of the few industry commentators with practical options experience, he has developed a substantial following among industry veterans and newcomers looking for insight into this complex market.Mr. Longo began his career as an options trader on the floor of the Chicago Board Options Exchange.
View Mark S. Longo's post archive >
