This page has been archived and commenting is disabled.
VIX Sept 50 Calls In Play: Someone Is Scrambling To Insure Against A Market Collapse
It's amazing to think that just earlier this week VIX traded at 13 (and that a few weeks ago the S&P was testing all time highs): as of this moment the vol index is up nearly 100% since Tuesday (and all those 'sure thing' shorters of VXX are about to get some very unpleasant margin calls).
But what would be far scarier is if whoever is suddenly offering a nickel for the VIX Sept 50 calls actually knows something.
Because if he "does", that would suggest a market move 'Straight out of Lehman.'
Alternatively, those who are confident there is no risk of a plunge in the next few weeks should just hit the bid until the buyer pulls it: after all, what can possibly go wrong with collecting nickels, literally, in front of a central bank steamroller (one made, appropriately, by CAT) that is rapidly losing credibility.
»
- 71704 reads
- Printer-friendly version
- Send to friend
- advertisements -
The VIX is more rigged than a pro-boxing match.
The FIX is VIXed
Last I knew they were euro option style. Doesn't seem like a very good hedge. but what the fuck do I know, having not gone to MIT.
Let them buy all the insurance they like. In the end no one will be collecting on the poilicy if it all goes belly up.
The only real insurance is going up, someone is steadily buying.
dow 15750 is the next test. 35 dollar oil.
Be calm everyone, just sell all of your PMS, buy the dip and don't forget some BitCoins for insurance.
We can't be at CATASTROPHE yet since there have been no Pre-Death Panel Hearings in Congress over funding the Social Bribery Net.
When Social Security Funding gets unanimously passed in Congress with a Signing Ceremony in the Rat House Rose Garden, you will know the Top is in. Esp. if there are tanks and troops with their guns pointed away from the Central Executive Airport just in case there is...you know...a large number of Politicians all booked to leave at the same general time...
RuffMuff is correct, they are Euro style. Too bad....I'm sitting on a fistful of 16 calls, which should be worth $8 at VIX24, but they are bid at 3.5 (or were an hour ago).
....Patience grasshopper....
thank you AC for helping the option ignorant understand.
It's not that someone "knows" something, someone is making a cheap bet that someone else is going to want to buy premium at a higher price. Isn't that the whole point, buy low and sell higher? I wouldn't read anything at all into it. The VIX is one of the markets greatest contrarian indicators.
This. Is. .....Flight Surgeon Horseshit!!!
Tongue.....You forgot to put the /S tag on your post
Funny thing how the only difference (on the net) between sarcasm and general popular stupidity is the person who's saying it.
The fix is vixed with the micks and ticks, and I want to dance like...........
Indeed it is Honky, and Tyler should post a link to one if not 2 articles within the past year that confirmed such, right here on this channel.
Maybe it's Kyle Bass, doesn't he like nickels?
Jim Chanos on CNBC right now is just ripping the bulls a new asshole.
When asked about Elon Musk "Elon who?" then mocked Solar City.
When asked about CVX stock buyback program and the safety of the dividend "One if not both, will be cut"
30% correction is in order. Puts the Dow at around 12800. I think that's where we'll go before the FED announces QE4, then its time to get back in.
I was gonna say it was Bass, too. You can bet your sweet ass, it's Kyle Bass.
Somebody is looking to make money on basic human stupidity......
Sure bet he is a winner.
Won't individual stupidity produce collective genius?
already set with my September 18 QQQ puts. Let's play!
And let the dead cat bounce high enuff to reach the toilet bowl. Get a little of swirl action of stir and purr....
Atta' boy!
I got some jan 2016 at 55 for .20 a few weeks back after the s&p was up for a few days. The bid ask spread is still wide though, even today.
Well, if this any indicator.
put that chart to 10 years and you can see the price of lumber that sounds the horns of collapse.
http://futures.tradingcharts.com/historical/LU/1983/9/linewchart.html
Better than those short term ETF thing a ma Jiggers?
even better. Looks like art to me
They are nickel bid and offered at 0.15. I am Canadian pehaps we use different terminology here but I had to re-read that about 5 times for it to make sense to me.
Shit, the calls/puts volume ratio . . .anybody here holding some of those puts contracts? I'm all ears.
Have accumulated 30 spy dec 2015 140's average cost .32 last trade .52. Hopein to see 180 which would be 15% drop and bid should be around 3.50-4.00 bucks but if we get lucking and get a 30% drop it would put me in the money at around 9-10 buck range.
.
kevin henry apparently showed up to work as the ''market'' as come well of the lows in minutes.
He better be on his toes going into the close.
I have been long volatility for quite awhile (with my gambling funds, not an 'investment' per se).
Reality must come back into this so called market. When it does, it should be quite something to watch...
As we speak the PPT is in action propping this bitch up as hard as they can! From down 320+ to down 220 in about 30 minutes??
NATURAL...
exactly....
laughing stock....
the day isn't finished yet - looks like it was rejected...
More likley someone is hedging an options play....How long have you been out of finance?
I was just watching the talking heads over at CNBC. They see the selloff as "eh, the market had just gotten a little ahead of itself..."
I'm glad I'm here 99% of the time and not following their guidance.
Let me guess: they brought Cramer on to suggest to keep buying stocks.
He's like the Gimp of CNBC who they keep in the basement and only bring out during the day when markets bomb.
https://youtu.be/S8kPqAV_74M
Easily one of the most manipulated instruments in the marketplace
Then there is this, nice work if you can get it.
Hedge Fund Gains $100 Million in Two Days on Bearish China Bet Surge enables ESG’s Nexus Fund to recover from losses earlier in year ByJuliet Chung
Aug. 21, 2015 1:54 a.m. ET
A Carlyle Group LP hedge fund that anticipated a sudden currency-policy shift in China gained roughly $100 million in two days last week, a sign of how some bearish bets on the world’s second-largest economy are starting to pay off.
http://www.wsj.com/articles/hedge-fund-gains-100-million-in-two-days-on-bearish-china-bet-1440136499?mod=e2tw
"Anticipated" right!!!!
The BIS throwing out bones to a lucky few again?
The Carlyle Group do have a special relationship with the government, doing all that defense work and all... didn't they hire the Bushes and many other neocons as well?
MARCH OF THE PIGS
The PPT tried to take ES back up to VWAP and got rejected.
Stop giving the vwap so much credit. It ain't all that.
There's a lot going wrong all at the same time-- a few deep OOM silver, gold or VIXX calls are certainly warranted. $150 is a small price for a good night's sleep ;-}
Dead Shemitah Bounce coming
Those of you who don't know what he means, research and take heed.
Besides the cycle of 7 years, not much can be said, except it has proven to be a real bear boner.
Are these the same folks that "predicted" 9/11? Somebody, somehow, always starts the avalanche.
And they call it "smart money." Yeah, right. Just like the guy that strikes a match to burn your house down.
Yep, like ol' Chuck Schumer mentioning that Indie Mac was BK.
- Ned
This aint shit, prior to Bush leaving office we were getting 500pt swings, this is just the engine revving up.
The central banks don't need any market participants other than themselves. Their goal since they are not governments but rather individuals that own the central banks is to own the world by printing infinite fiat. That is what is underway. If they can remove all corporate ownership from the markets except for themselves then they will have achieved their goal. The world cannot continue to grow. They know that too. Time to downsize, eliminate and control.
I think the other alternative scenario is that the Fed is purposefully collapsing the fiat currencies of the world to engineer the next monetary regime whereby everyone has to trade a "Global ccy" such as the SDR and then they will somehow try to make it electronic eventually so they can keep better track of everyone.
I know gold will play a role somehow... I don't believe China is buying it just to buy it, but I think it has a role in the next system "temporarily". I think the Fed in conjunction with all major US and Euro banks have manipulated Gold prices lower so that China can buy at lower prices.... in return China doesn't sell the trillion in USD and Treasuries they have.
Don't know which I'm enjoying more: seeing my gold investments climb in value or seeing investors in other stocks get the shit kicked out of them for a change.
I was/am enjoying both, thank you.
Hey sister-in-law, kiss my ass.
i'm like pre-prepared having read ZH these past years...except my PM's werent supposed to be down here so I'm as DOWN as everyone else.
You were wondering about low volumes and what about tax evasion while still allowing U.S. tax payers to be vulnerable to losses if crooks can play their old games elsewhere?
http://www.reuters.com/investigates/special-report/usa-swaps/
Yes,they run and control the politicians.
All the major indices just broke 2% to the downside within minutes of each other
lets see if Tyler can find the bottom today...
HFT's playing games with volume.
Buy metal.
AND HERE"S BULLARD!!! ROFL
article writer is confusing buying and selling. the OFFER shown of 0.05 means that someone is willing to SELL these calls, presumaby naked.
it sure as hell makes a lot more sense to be selling (writing) them than to be buying them. it's "selling premium" which means collecting nickels expecting that you won't get run over by a freight train.
Picked up 50 more oz. of AG this morning, still in the shipper. I haven't touched it yet but I know it's mine.
I confess I don't know if the multiplier here is the same 100 it is for options on equities, but let's just assume it's 100. Then ...
Any piker here with Level 5 trading authorization on a margin account can naked "write" those options on the VIX index ... and collect $5 per contract, and hope it expires unexercised. but your risk is theoretically unlimited.
https://scs.fidelity.com/webxpress/help/topics/learn_trading_options.shtml#levels
What are the different levels of option trading available at Fidelity?Below are the five levels of option trading, defined by the types of option trades you can place if you have an Option Agreement approved and on file with Fidelity.
The option trades allowed for each of the five option trading levels:
Covered call writing of equity options.
Level 1, plus purchases of calls and puts (equity, index, currency and interest rate index), writing of cash covered puts, and purchases of straddles or combinations (equity, index, currency and interest rate index). Note that customers who are approved to trade option spreads in retirement accounts are considered approved for level 2.
Levels 1 and 2, plus spreads, covered put writing (selling puts against stock that is held short) and reverse conversions of equity options.
Levels 1, 2, and 3, plus uncovered (naked) writing of equity options, uncovered writing of straddles or combinations on equities, and convertible hedging.
Levels 1, 2, 3, and 4, plus uncovered writing of index options, uncovered writing of straddles or combinations on indexes, covered index options, and collars and conversions of index options.
Ukraine owes Russia $500 million on Sept. 23rd.
I don't think it will be paid.
Especially if they're price gouging the Pollock's on electricity.
August 21, 2015
Rome, Italy
I grew up in Texas in a middle class household to two very hard-working parents.
And to say we were middle class may even be a stretch. We were definitely clinging to the bottom rung of middle class.
Money was always a problem. And my parents each held multiple jobs in addition to making a go of their own business in order to make ends meet.
I never missed a meal. But the constant stress and worry about how we were going to pay the bills that month was palpable.
We didn’t have medical insurance or any savings, meaning we were just one illness or urgency away from being wiped out.
There always seemed to be too much month at the end of the money. So every penny mattered.
We didn’t buy anything unless it was (a) necessary, and (b) a major bargain.
Things eventually got better, as they tend to do. My parents found their financial footing and became more successful. And I’ve done well in life.
But I’ve taken those middle class values with me into the world, and they’ve deeply impacted my own investment ethos.
Just like what was drilled into me when I was a kid, I can’t stomach overpaying for anything. Even when investing, I’m only interested in a major bargain.
This happens occasionally in investment markets, though it’s extremely rare today.
There are plenty of profitable, well-managed companies out there. But they’re incredibly expensive. Twitter, for example, has a valuation of $17 billion. Yet it lost nearly $600 million last year.
Netflix manages to grind out a profit; but the company is valued at more than 200 times its earnings.
AirBnB is a private company. Yet its value is at least $25 billion even though it doesn’t own a scrap of real estate or turn a profit.
These all strike me as extremely expensive. And ludicrous.
But it’s unfortunately the norm these days.
Most financial assets are in major bubbles, whether it’s real estate (yes US housing is at that point again), stocks, bonds, private equity, etc.
So it’s very difficult for anyone with middle class values to invest... unless you expand your thinking to the whole world.
There are pockets of value out there if you look hard enough-- like mining companies and developing markets.
Let me give you an example of something that I bought recently, and talk you through my thought process. As a caveat, I should tell you that I generally dislike stocks.
Stock markets are a rigged game designed to extract wealth from the little guy and put it in the pockets of investment banks and high frequency traders.
So for me to be interested, there better be some serious value on the table.
Royal Dutch Shell, one of the world’s largest oil and gas companies, is a good example.
Thanks to the slide in oil prices down to $40 (and perhaps lower), Shell’s stock price has been hammered.
So the company is trading right now at the value of its net tangible assets.
In other words, by buying Shell stock, I’m purchasing every asset the company owns at COST.
Yet on top of that, they pay a 7% dividend yield.
In real estate, it’s like being able to purchase a beautiful house in the best part of town at a price that barely meets the cost of construction.
And on top of that, there’s built-in rental income that starts putting money in your pocket right away.
This is a solid deal in my mind, especially for a company that has a long-term history of consistently growing its dividend yield.
(By the way, I can reinvest the dividends that they pay me into more shares, so I’ll be continually adding to my position over time.)
The added benefit is that Shell is not a US company.
I bought the stock overseas (I’ll explain why next week) and paid in British pounds.
So I could make money off the dividend. Or if the stock price goes up. Or if oil prices go up. Or if the pound appreciates against the dollar.
That’s one of the primary benefits of investing internationally: there are a LOT of different ways to make money.
And it makes a ton of sense to do this now that the dollar is at a 10+ year high against nearly every major currency out there.
(Again, developing markets are looking especially cheap, and I also bought into some of them as well, including Russian and Colombia.)
To be clear, I’m not recommending that you follow me into this.
It’s entirely possible that Shell’s stock gets cheaper. In fact, I’m expecting it. I also expect it will stay cheap for a very long time.
I just have the willingness to wait, because I know that it’s hard to lose when you buy profitable assets so cheap. Plus, Shell has seen worse in its history.
During World War I, for example, German forces wiped out over 20% of Shell’s production capacity.
So I’m confident they’ll be able to weather $40 oil without collapsing.
Have a good weekend,Simon Black
Founder, SovereignMan.com
I'd rather invest in food and water.
I'd rather invest in the MSCI Submerging Markets Index
Henry, is that you?
Call me on your shoe phone (174-2343).
$3 Billion Ukraine debt default looms on September 23rd.
What will Russia do?
VIX 55 Call is trading at 4x the volume as VIX 50. Might be time to update the headline...
re Someone Is Buying Market Collapse Insurance.
If they bought it off Lloyd, the payout has probably been re-re-re-hypothecated to the day's proceeds off a tacos stand in downtown Tijuana by now
Do you mean....its gone???
Is Bullard a KIKE?
Does a bear shit in the woods?
Just a note. If you are buying "market collapse insurance", you better make fuck well sure that the seller can meet all obligations in the face of a general market down turn! Remember 2008? How many of these sellers of insurance and hedges, could not meet all the calls on their written insurance swaps and the like?
Insurance is only as good as the fiscal soundness of the seller. In fact, I do not trust this whole idea that you can buy insurance against a market melt down. IF, the market melts, so do most entities connected to the markets. AND, WHO, in their right mind, would sell the promise to make good someones market losses, knowing we are in an epic market bubble, blown by the Fed, and subject to implosion the instant the Fed prop is taken from under the Lead Balloon, that is this market?
Good point!
Well, your point makes perfect sense. That is why the Fed entered in 2008 and saved all those insolvent companies, incl. AIG. Just push the expenses over on the taxpayers. Problem solved.
People play the lottery all the time. Does not mean they know anything. Same here even if the VIX does hit 50.
Genetic changes stemming from the trauma suffered by Holocaust survivors are capable of being passed on to their children, the clearest sign yet that one person’s life experience can affect subsequent generations.
"See? See? Now you have to KEEP on giving us money, forever and ever and ever and ever and ever ..." -- Nodding Yahoo
Read more: WHAT REALLY HAPPENED | The History The US Government HOPES You Never Learn! http://whatreallyhappened.com/#ixzz3jTUvoyFu
Its more than just a few nickles. If VIX goes to 50 a $0.15 contract would be worth almost $2. a $15 contract turns into $200, that is a 1300% gain. After reading this I actually bought 5 contract myself. Turn $75 into $1000 sounds like a solid risk/reward ratio to me.
Prepare to get Vix-nadoed by the Fed...
All your gains will be vaporized when they announce no rate hike in September. Those options are low liquidity and european style too meaning you are going to have to hold them until expiration so there is no cashing in your gains early.
Thats why I just flip the contract and collect the premium. I almost never convert my options into stock.
Good Luck. The VIX 50 is not THAT bad for speculation. This will bring S&P down to (W500) closer to 19,500 which is actually the next big support area if we get below 20800. However if you are hedging it is bad trade since Prob ITM is less than 10%.
After reading this I actually bought 5 contract myself. Turn $75 into $1000 sounds like a solid risk/reward ratio to me.
So that would mean the multiplier is 300.
And you did what's called buying a lottery ticket because the other side of the trade is the house, and the "smart money," which is SELLING, as exactly the opposite of the so-called article. Because the entity that posted the 0.05 price is doing the exact opposite of what the headline and article says and is and is therefore "betting" on no VIX spike and the ho-hum continuation of whatever it is.
You as the dumb money were buying. Seller as the house, or smart money is the one that posted that 0.05 offer, for which you said "hit me" for 5 contracts.
Headline has it all wrong, but it got your attention and made you do the exact opposite of the headline, but hey, you were paying attention and figured it out, obviously.
Told ya. Sold out today at $1.75 and $1.50. Tried selling at $2 but markets were buggy.
Look at that drop.
Wha' 'appened?
Reality?
Wait a minute guys,I see a light at the end of the tunnel that's coming this wayl let's hurry up and head that way, it could be yellen coming for to carry us home!!!
Follow LIEsman he will lead us to safety...
Hmmm! Are we done with selling? A lot of Buyers in the last hour!
where does one finnd the quotes for the vix futures? What happened after vix spiked this pm?