Volatility Views Volatility Views 627: Emergency Session as Tariff Madness Rocks the Market
Apr 4, 2025
In this discussion, Russell Rhoads, also known as Dr. VIX from the University of Indiana, and Andrew Giovinazzi, The Rock Lobster from optionpit.com, tackle a chaotic week in the markets. They analyze the surge in VIX to the 40s and the surprising volatility patterns that emerged. The duo dissects notable trades in VIX options while sharing insights on trading strategies amid the turbulence. With geopolitical anxieties at play, they offer cautious predictions for upcoming market movements, urging listeners to stay vigilant.
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Muted VIX Reaction Indicates Prolonged Volatility
- The muted VIX reaction on early sell-off days signals a longer-term volatility move, not just a one-day event.
- Lack of monetization of long volatility positions indicates traders anticipate further market turbulence.
Hold Some Volatility Exposure
- Keep some volatility exposure dry during initial muted moves, as subsequent bigger volatility spikes may follow.
- Resist monetizing all long volatility positions immediately; strategic patience can yield better payoffs.
Historic Market Sell-Off and VIX Spike
- The market's severe sell-off reached historic levels with major indices down about 5% in one day.
- The VIX surged above 40, reflecting extreme market fear and volatility seldom seen since March 2020.