7.3 KiB
To all the VIX watchers today and impending doom people......take it from a VIX veteran who has gained and lost shitloads.....Pump the brakes. I'll explain
| Author | Source |
|---|---|
| u/anonfthehfs |
This sad beaten up bear will explain the VIX
Apes,
This is an area I think I can be helpful in answering some questions. I have gained and lost shitloads trying to time corrections with TVIX (No longer around), UVXY, VXX, FAZ, SPXS, etc. So I feel like I can be helpful to this community when talking about VIX and some rookie mistakes.
First off, what is the VIX?
VIX is the ticker symbol and the popular name for the Chicago Board Options Exchange's CBOE Volatility Index, a popular measure of the stock market's expectation of volatility based on S&P 500 index options. It is calculated and disseminated on a real-time basis by the CBOE, and is often referred to as the fear index or fear gauge.
(Summary: The VIX just a mathematical equation of average days in a month (30 days), risk free rate, 30 day forward price on the S&P, and prices of calls and puts with 30 day maturities)
Ape Speak: Basically, it's trying to measure the Implied Volatility of the S&P. People call it the fear index because it looks at people buying Puts on the SPY (S&P 500) vs calls and the other factors I listed in the equation**.** But basically it is just an indicator showing you that people are betting (Placing Puts on the SPY) that the S&P 500 is going to go down. (It's more complicated than that but I'm just trying to make it easy for the average person on here)
What does it do?
The VIX is a measure of the current price index options. There are direct correlations to prices of options tied to the VIX. You will find that when the VIX rises, options tend to be more expensive. When the volatility increases, options IV's often go up as well.
What does it not do?
The VIX is actually not a great indicator of the future. It really just tracks the inverse of price in my opinion.
Corruption
Guess what Apes, MORE FUCKERY. The more I learned about the VIX, GME and how the markets work....I realized how options work for the biggest players and how they actually can manipulate the VIX. Why would they do this?? Guess what.....it has to do with options/derivatives markets.....shocking and controlling the market.
1. Griffin, John M.; Shams, Amin (May 23, 2017). "Manipulation in the VIX?". SSRN.com. doi:10.2139/ssrn.2972979. S2CID 157586475. SSRN 2972979. Retrieved 25 February2020.
2. ^ Cornish, Chloe (13 February 2018). "Anonymous 'Whistleblower' Claims 'Rampant Manipulation' of Vix Index". Financial Times. Retrieved 26 February 2020 -- via FT.com.
Pump the brakes Apes.......
So what those the VIX mean for Apes? It means people are betting the market is going down and that does not mean GME moons today. (I mean it could but I find it unlikely at this point) I get it, the VIX is a fast moving indicator, it sounds cool, and it's for gamblers who have many make or break plays.
The very nature is kill it or be killed with VIX ETF's. You hit big once and you can make tons but you will lose more often than you win. I'm serious, those ETF's I mentioned earlier have daily decay and are meant to be short term plays. You have to hit a fast moving curveball out of the park or you will probably lose your shirt playing VIX stocks.
I DO NOT RECOMMEND ANYONE TRADE VIX STOCKS. BUYING GME AND HODL IS WAY SMARTER. (Not financial advice but my opinion)
This is where the big guys get you. (In a bull market) Every couple months, they get everyone talking about doom and gloom when near market highs. They get tons of people thinking, this is it.....the market is going to correct and they start buying SPY puts and VIX stocks. Retail traders flood the put side and the VIX rises......THEN "THEY" CRUSH RETAIL by just flooding the market with buying power.
(*Look at the SPY just climbing right back out off the 435 bounce. They will now get bulls to buy back in thinking that STONKS always go up......then fall back to max pain tomorrow. Don't believe me.....Max pain as I'm writing this is 437. If history is an indicator.....we will ping pong back and forth trying to draw in as many people into losing on options. They will hold really close to 439 and maybe run it over to like 441 then they will drop quickly when the call options fill in and then drop it out of the money back to 436. This sort of shit happens on the weekly but most people don't notice.)
When I saw this VIX up today, my first thought was to buy short term Calls because this is what they do. They want people buying puts and then they just gap up and crush the bears. (AKA BEAR TRAP and they do this ever so often because it works) and they try to draw the bulls back in and then crush them too.
Just watch where max pain is and it usually falls pretty damn close it it each week. Watch for 437 on the SPY.
What should we be looking for?
If you want to start learning more, http://vixcentral.com/ this shows the VIX futures.
When that goes straight up.....that means shit is going to hit the fan. It's not currently. So pump the brakes a bit.
I know we like the hype but I feel like we should have a good understanding with so many smart people here. I've been trading a long time and thought I would share what I know about the VIX. I've never seen a stock at like GME. Where there is smoke.....there is fire.
BUY GME, Don't fuck with Options, and HODL.
1. UVXY isn't a direct correlation to the VIX. It has to do with the M1 and M2 futures found in the http://vixcentral.com/ link here.
2. These inverse ETF's decay and are not meant for long term plays.
3. VIX can be manipulated so take that with a grain of salt
Let me know if you have any questions?
Much love