VIX; Something's broken behind the curtain
Disclaimer
This is not financial advice, this is just an observation and speculation.
$SRVIX spiking in the past few days has been one of the most interesting developments. As a metric of the insurance on derivatives, it raising increases the question of why is someone so afraid of derivatives all of a sudden.
Gamma squeezes are setup across the board on many stocks, either due to the post-summer excitement (bankers still leave for the summer, and will set some bets towards the end of the summer so they can come back and deal with it if it hasn't worked itself out), or just a general rolling of options from previous months. Either way, 8/20 seems to have become a rather momentous day for options.
$VIXM maintaining high values post COVID makes sense if you view it as a slow moving average; COVID chunked the market, and it bounced back so quickly that the volatility index on the short-term was like "yes, we have been volatile but ended net 0", where as this trailing VIX is going to account for just how much volatility there really, really was.
$VIX itself spiking fairly recently is probably a remnant of gamma plays like $MRNA $HOOD etc. While one might think these plays are contained to these stocks, money needs to come from somewhere, so while $MRNA is spiking, other stocks are selling, and market makers need to move their own money in order to hedge against the movement. Too often we view pump and dumps as isolated events, but the stock market is one big pool, and splashes will cause waves. My biggest question is, over the next week as we develop into the 8/20 options week, and as September builds up with all of the new rules coming into effect from the DTC, DTCC, NSCC, SEC, etc., how will the pool react?
This author expects major disruptions to the pool as a whole. The major indices have unraveled from their underlying assets, and the entities responsible for keeping them tethered to each other, the market makers, are off committing criminal phantom shorting and manipulation across the entire world's markets. $GME is still a ticking bomb waiting to go off, and with it comes every other stock that got thrown into $GS Goldman Sachs ETF-like baskets.
One important thing to pay attention to is this; none of these tickers can tell the future, and none of these went off before the major COVID crash. The only metric you can trust, is yourself, your risk-appetite and your investment goals.
This author has hedged the market crash against a cure for cancer in their own investments, splitting between $GME and $CVM. This has been the most manipulated and fractured from reality market I have ever seen, even more so than in 2007 and 2008.
This is not financial advice, this is just an observation and speculation.
$SRVIX spiking in the past few days has been one of the most interesting developments. As a metric of the insurance on derivatives, it raising increases the question of why is someone so afraid of derivatives all of a sudden.
Gamma squeezes are setup across the board on many stocks, either due to the post-summer excitement (bankers still leave for the summer, and will set some bets towards the end of the summer so they can come back and deal with it if it hasn't worked itself out), or just a general rolling of options from previous months. Either way, 8/20 seems to have become a rather momentous day for options.
$VIXM maintaining high values post COVID makes sense if you view it as a slow moving average; COVID chunked the market, and it bounced back so quickly that the volatility index on the short-term was like "yes, we have been volatile but ended net 0", where as this trailing VIX is going to account for just how much volatility there really, really was.
$VIX itself spiking fairly recently is probably a remnant of gamma plays like $MRNA $HOOD etc. While one might think these plays are contained to these stocks, money needs to come from somewhere, so while $MRNA is spiking, other stocks are selling, and market makers need to move their own money in order to hedge against the movement. Too often we view pump and dumps as isolated events, but the stock market is one big pool, and splashes will cause waves. My biggest question is, over the next week as we develop into the 8/20 options week, and as September builds up with all of the new rules coming into effect from the DTC, DTCC, NSCC, SEC, etc., how will the pool react?
This author expects major disruptions to the pool as a whole. The major indices have unraveled from their underlying assets, and the entities responsible for keeping them tethered to each other, the market makers, are off committing criminal phantom shorting and manipulation across the entire world's markets. $GME is still a ticking bomb waiting to go off, and with it comes every other stock that got thrown into $GS Goldman Sachs ETF-like baskets.
One important thing to pay attention to is this; none of these tickers can tell the future, and none of these went off before the major COVID crash. The only metric you can trust, is yourself, your risk-appetite and your investment goals.
This author has hedged the market crash against a cure for cancer in their own investments, splitting between $GME and $CVM. This has been the most manipulated and fractured from reality market I have ever seen, even more so than in 2007 and 2008.