Volatility Views 585: A Strange End to a Strange Week
May 31, 2024
auto_awesome
Analyzing volatility products like VSTOXX and VIX, bullish VIX options trades, trading VSTOXX domestically, predicting future VSTOXX and VIX levels in a crystal ball segment
Growing demand for institutional hedges in VIX options market indicates increasing risk awareness.
Preference for put options in VIX trading reflects cautious sentiment and focus on downside protection.
30-day straddles are being closely monitored as an indicator for market volatility and options strategy pricing.
Deep dives
Demand for institutional hedges increasing
In the VIX options market, there has been a noticeable increase in demand for institutional hedges as investors seek protection against potential spikes or black swan events. This trend suggests a growing recognition of risk and the need for appropriate hedging strategies.
Preference for put options observed
Put options have been predominantly favored in the VIX options trading recently, indicating a preference for downside protection among traders. The heightened interest in put options suggests a cautious sentiment in the market and a focus on mitigating potential losses.
Strategies involving 30-day straddles analyzed
There has been a significant focus on strategies involving 30-day straddles, with a specific emphasis on analyzing the potential expansion of straddle positions. Traders are evaluating the pricing and movement of 30-day straddles as an indicator for market volatility and pricing of options strategies.
V Stocks and VIX Movement Analysis
The discussion delves into the recent movements in V Stocks and VIX, with a significant increase seen in V Stocks. The comparison between the two indicators reveals a notable divergence in correlation, allowing for distinct trading strategies between Europe and the US. Access to V Stocks derivatives through partnerships and detailed insights into the European benchmark, Euro Stocks 50, are highlighted. The availability of V Stocks trading during extended hours from Asia to late European hours is emphasized, showcasing trading opportunities across varying time zones.
Data Resources for V Stocks Analysis
The conversation extends to data analysis resources for V Stocks, focusing on leveraging platforms like Bloomberg and bar chart dot com for historical data retrieval. The significance of cross-referencing data and utilizing specialized databases for model creation and testing is underscored. Practical insights are shared on database management for monitoring V Stocks-Futures dynamics and underlying spread assessments. Recommendations for accessing V Stocks historical data through cost-effective platforms like bar chart dot com are provided, allowing for informed trading decisions based on data analysis.
On this episode of Volatility Views, we break down the volatility products in both the domestic and international markets this week including VSTOXX, VIX, VXX, VVIX, UVXY, SVIX, UVIX.
Analyzing the weekly VIX options activity - Continuing to see bullish VIX options trades expiring on June 5th
Discussing how to trade VSTOXX domestically - V2TX on IB's platform
Explaining where to find VSTOXX historical data
Plus, we predict where VSTOXX and VIX will be next week in our popular crystal ball segment.
With your hosts,
Mark Longo from The Options Insider Media Group
Mark Sebastian from The Option Pit
Russell Rhoads from the Kelley School of Business at Indiana University