Tuesday, July 7, 2009

The VIX

After a recent downtrend in the CBOE VIX index, we have seen it close above 30 for the first time since June 23rd. The indicator is up nearly 25% since its intra day low last Wednesday.

As option traders we need to keep in mind key macro indicators and what they are telling us. Over the last week we have seen the SPY grind lower, and with it volatility creeping up. Are you positioning yourself accordingly? What signs are you looking for to determine what side of the market to be on? Sometimes a simple step back from the tick by tick action is enough to provide a clearer view.

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