VIX In World Of Its Own - Or Are 'The Hedged' Unwinding?

Tyler Durden's picture

While we have explained again and again why a falling spot VIX is not the panacea of risk indicators (simultaneous and curve shifts), it is however, the easiest lever for algos to drive equities at the margin on a thin day. Sure enough, as we head towards the 3pmET ramp time, VIX sellers are back en masse and while they managed to get S&P 500 futures up to VWAP, it would appear hedgers are more comfortable unwinding real positions (vol down, vol curve flatter, and stocks down). 60 minutes of fun left to see who wins...


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vote_libertarian_party's picture


idea_hamster's picture

      60 minutes of fun left to see who wins...

Maybe this time, it will be the little guy!  The retail investor!  Maybe this time, he'll win!


Cognitive Dissonance's picture

I'm putting it all on Red 22.

<Don't tell Mrs. Cog.>

Cognitive Dissonance's picture

Well......that explains a lot. :>)

Black 22

Nothing To See Here's picture

The Fed can always bail you out if you gamble it all on Red 22

Cognitive Dissonance's picture

Already have my application filled out in black ink (as requested in the fine print) and ready to file with the Fed.

<Anybody got that fax number handy?>

idea_hamster's picture

...and that JPM's CIO sold him the "red 22" option, and then shorted the crap out of it.

azzhatter's picture

Fuck You Bernanke

buzzsaw99's picture

VIX. Rub some on your chest and it makes spyders run away. [/not making sense]

SuperDeDuper's picture

VIX wins, market rebounds to slightly red before close.  Then headline says '2 day losing streak, are markets turning?' on 2 days of very small losses.  Then tomorrow out of the gate we go green but +100 plus in the DOW due to a 'beat' on estimates from Alcoa even though they substantially decreased expectations.  This market is so easy, even a cave man could trade in it.

CPL's picture

Complete market corruption and questionable delivery?


That's Bullish.

earleflorida's picture

so says 'superdeduper Mario... as the market gets 'Donkey Kong'd!'

fonzannoon's picture

schiff's firm keeps spamming me with fdic insured market linked cd's. in the watch what they do not what they say department i find it unnerving.

CPL's picture

Reply back with professional naked cam photo of yourself with A/S/L/420? in the subject.


When the world creeps you out, troll it back.

Panafrican Funktron Robot's picture

Portfolio insurance rears it's ugly head yet again.  

busted by the bailout's picture

Call me stupid; I bot VIX today. 

Now, no doubt, earnings season will take us to 1500 and the VIX to 10.

fonzannoon's picture

I won't call u stupid, but it puts emphasis that the retail guy still will commit money and give it away. it just goes on and on.

earleflorida's picture

someone or something could warn tonight after the 'bell toll's', the 'vix', is not an anomaly? to be taken for granted?... never go with the crowd, period!


Cycle's picture

Trading the VIX can be rewarding or a disaster. If you are a retail investor, I'd make sure to read and digest and maybe go over and take a look at So why trade the vix derivatives?  Believe it or not, I found that the VIX behaves comparatively quite well when deconstructed by a neural trading model, whereas other heavily traded equities tend to suffer from HFT-associated noise and stop loss probing, which tends to confuse the forecasting models.


Pareto's picture

I thought that the Feb 29 strike was sure to post gains a couple of days ago.  Well at least i defined my risk.  100 lashes with the VXX whip please for being as dense as a sack of shit.

mrktwtch2's picture

bought some march puts for cheap in the spx..oh well all i can lose is the premium..but if we see 15% jump inte next 2 weeks..well lets hope

youngman's picture

Bob Pissonme just said the dark pools is now 25% of the used to be 7% just 4 years ago.....two market for for hiding..both good for the faith of the average Joe....NOT..

AccreditedEYE's picture

JUST. BUY. STOCKS. gonna make some moooooneeeey!

disabledvet's picture

CEO's and Big Banks...still winning even now. "the rest of us get to take on Bashar Al Assad." Hell it's probably a hedge fund tycoon (former...having been long volatility three years running) in charge of the unit. I can hear the cadence now: "Your sell, your sell, your buy, sell sell."

Clowns on Acid's picture

Wait a minute...if earnings are up does that mean no Q4? Does it mean that we can cut Fed spending a little bit?
If earnings are down....that means definitely Q4, and no Fed spending cuts?
I one has to stick to the Fed narrative here.

busted by the bailout's picture

I don't think earnings will have any bearing on QE4.  The Fed needs to keep funding federal borrowing at low rates, so they can't stop at this point.

busted by the bailout's picture

"Does it mean that we can cut Fed spending a little bit?"

Of course we can, but do we have the political will to do it?  Or more accurately, can the gutless wonders in DC find the courage to cut spending?  At this point, probably, but your words "a little bit" describe best what we are likely to see this year and next, imo.  (Beyond that who knows what will happen?)

We need to turn the ship at least 90 degrees to avoid hitting an iceberg, but they will probably only turn it one or two degree in the foreseeable future.  They lack the courage to do more, imo.

AccreditedEYE's picture

There it is.... BOOOM!

Joe moneybags's picture

With the actual S&P daily fluctuation of plus or minus .5%, the VIX is behaving normally ( about 13).  To get the VIX (the implied volatility) above 16, we need to see the actual S&P fluctuations near 1%.  In the past, this low actual volatility is coincident with bull market rallies.  So, for bears wishing to put on their shorts, wait until real volatility shows up (big daily down moves), as opposed to tiny negative days.

busted by the bailout's picture

Thanks, I'm usually early, and sometimes just plain wrong too.

magne13's picture

Aussie Euro is better indicator of risk than vix, does anyone honestly think in an algo driven fixed market backed by nothing more than the FED that there is truly any real risk metric?  This is simple, buy aussie, sell euro, sell us equities, buy nikkei and above all else SELL THE YEN, good god, who the hell fools around with vix anyway? if you do the casino's (getco and citadel) will take all your chips, good luck

Jack Burton's picture

Student loans are THE crisis of modern times for America's youth. On the back of easy borrowing terms the American University establishment has built a giant money making machine and a giant home for underworked University Staff from the instructors to the janitors. All the highly paid and clearly underworked staffs are feasting off of relentless tution increases every single year outstripping core inflation by orders of magnitude.

The youth have been suckered into a grossly over expensive education system designed by the University faculties and administrations to create comfortable and highly paid postions whose major goal is to perpetuate their comfortable rape of America's youth.

While professional schools provide a path to economic prosperity for students, the costs for this education are out of control. The majority of students are not in professional schools but in a general degree factory that prduces millions of nearly useless degrees. And for those that can lead to a job, such as say Criminal Justice degrees, for every job created in law enforcement, the universities train 10 students or more and feed these students the false hope of being that 1 in 10 or 1 in 20 that actually can land a job.

The big box reatailers, fast food outlets and restaurants and bars of America are stocked with college graduates working at minimum wage and burdened with massive student loans.

Even highly paid doctors are entering their careers with a burden of debt that requires years of repayment. It was not like this back in the 50s-60s-70s, but by the 80s, the relentless scam of higher and higher fees began to drive universites in self serving rip off artists.

Just look at the work load of these college instructors and administrators. They are grossly over paid, under worked and nothing seems to stand in the way of their raising fees over and over again every year despite inflation in general being a fraction of the yearly increases they impose on students.

magne13's picture

Yes there is one thing that stands in their way, the end of subsidized education and high sustained unemployment, as the masses final figure out that the education system is nothing more than a money laundering scam designed to subsidize college administrators, television contracts for sports and egg head experiments and aging pension systems, thankfully the mayans were right and the beginning of the new era is here.

secret_sam's picture

The relative success of the "for profit" school business-model is already suffering dramatically.  I attended one such school myself a few years ago, and they're out of business now. 

This will continue and will spread from the "for profit" schools to the non-profits as well, it's just a matter of time.  A large percentage of the customer-base for a college degree has already been burnt by the financing industry and will not be eligible for "guaranteed" loans under the current laws.

Eventually, either the massive growth of the "education" industry will correct and many schools will close, or the government will draft new legislation to "reboot" the guaranteed loan programs for the potential students who are not yet sufficiently indebted or broke.

toncuz's picture

According to a 2008-09 survey by the American Association of University Professors as shown by the U.S. Bureau of Labor Statistics, the average salary for full-time faculty was $79,439.

Average CEO of American corporation = $10,000,000....that's TEN MILLION or four thousand dollars an hour for frauds who pretend to be Steve Jobs though there was only ONE Steve Jobs... We could pay Harvard grads to drive the economy into the ground for a lot less... If the American worker were to have his average salary QUINTUPLE as the CEO's have the last 20 years since conservative economics took over...there would be no worry about tuition...or healthcare ...or anything else.... Yes, students are getting ripped off.... But, America, shareholders and workers are getting pillaged, raped, stabbed, burned, annihilated and ground to a pulp. And you're worried about teachers.
Freddie's picture

BS.  CEOs suck but professors make more than $79.5 per year.  Full time faculty can include instructors who get paid a lot less because of tenured featherbedding arseholes.

Colleges are a scam like most CEOs pay.