1/ Markets are down and the Vix is...down.
Why is the Vix sub-14? And what is the Vix?
Debrief from my convo with a equity volatility options trader.
What happens from here?
Charts below.
#VIX #volatility #nvidia
2/ Vix closed at 13.5 today.
The VIX, or Volatility Index, is a measure of expected price fluctuations in the S&P 500 Index options over the next 30 days.
It is often referred to as the "fear index" or "fear gauge" because it represents the market's expectation of volatility.
3/ The Black-Scholes (or related equations) are used to back-out the implied volatility. Observed put/call prices on front-month contracts
4/ This is the Commitment of Traders report on the Vix published by the CFTC.
Red = Dealer
Green = Asset Manager (think Bridgewater)
Blue = Small speculator
Rules of thumb:
- Avoid being on the side of small speculators
- Avoid crowded positions (which is the case now)
5/ Nvidia is going parabolic.
A site to behold.
Prior thread shows Nvidia does have a multi-year fundamentals trend behind it. Nvidia is not Cisco.
But, Nvidia's PEG (P/E ratio divided by growh rate) - a loose proxy for assessing value - is > 5
6/ One of my favorite indicators - Smart Money vs. Dumb Money index.
Each index is an amalgamation of various indicators (e.g., retail open interest, the COT report, etc.)
Short-term this suggests close to near-term top. )
Note: All indicators are fallible.
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