SPY Option Skew Steepening Significantly Ahead Of OpEx
With At The Money vol dropping markedly over the past 4 days, and the VIX plunging, the green light to buy stocks ahead of OpEx was given by those who traded 25% of the market volume in just 5 financial stocks purely as a result of yet another massive squeeze, dragging the balance of the market. Yet observing the wings indicates a significant steepening of the skew, especially in the last day. On the other hand, it could be simply churn moving away from stocks and into options. However, with today's bleak jobs data, offset by optimism out of Philadelphia, while China is doing all its can to preserve the bubble one more day, at this point there is no question that fundamentals have no bearing whatsoever in this market and momentum drives all. Every trade is merely a coin toss.