We experienced what is known as volatility crush today.
The investors fear gauge, otherwise known as the VIX lost close to 16%. As an options seller who takes advantage of heightened levels of volatility, today was great…but more importantly, I expect more opportunities ahead. Why? Simply stated, uncertainty.
The government shutdown, debt ceiling woes, etc. have finally pushed implied volatility off of historic lows. My hope is that the volatility index can stay above 13, preferably 15. Because we know that a push below 13 makes it very difficult to sell meaningful premium while simultaneously creating a decent margin for error.
The higher the VIX, the more premium we can bring in on each and every trade, plus we have the opportunity to create a larger margin of error.
I will be discussing in detail how I plan on approaching the upcoming trade this weekend in Vertically-Inclined. Stay tuned!
One thing I can say, I’m in full iron condor mode right now to take advantage of the inflated levels of premium. So far, so good.
If you are a believer in a statistical approach towards investing please do not hesitate to try my options strategies. I use simple mean-reversion coupled with probabilities for each and every trade. Give it a try, it’s free for 30 days.
If you haven’t, join my Twitter feed or Facebook.
Kindest,
Andy
