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Tag Archive for: ($VIX)

april@madhedgefundtrader.com

September 8, 2025

Diary, Newsletter, Summary

Global Market Comments
September 8, 2025
Fiat Lux

 

mostbet mostbet giriş mostbet mostbet giriş

Featured Trade:

(MARKET OUTLOOK FOR THE WEEK AHEAD, or WATCHING HISTORY RHYME)
(GS), (JPM), ($VIX), (CRM)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-09-08 09:04:322025-09-08 10:54:14September 8, 2025
april@madhedgefundtrader.com

August 21, 2025

Diary, Newsletter, Summary

Global Market Comments
August 21, 2025
Fiat Lux

 

Featured Trade:

(MY NEWLY UPDATED LONG-TERM PORTFOLIO)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-08-21 09:04:542025-08-21 12:50:20August 21, 2025
april@madhedgefundtrader.com

August 19, 2025

Diary, Newsletter, Summary

Global Market Comments
August 19, 2025
Fiat Lux

 

Featured Trade:

(LAST CHANCE TO ATTEND THE FRIDAY, AUGUST 22, INCLINE VILLAGE, NEVADA STRATEGY DINNER)
(THE MAD HEDGE DICTIONARY OF TRADING SLANG)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-08-19 09:06:512025-08-19 12:23:54August 19, 2025
april@madhedgefundtrader.com

August 18, 2025

Diary, Newsletter, Summary

Global Market Comments
August 18, 2025
Fiat Lux

 

Featured Trade:

(MARKET OUTLOOK FOR THE WEEK AHEAD, or CLUELESS),
(NVDA), (MSFT), (BAC), (DHI), (LEN), (KBH), (PHM), (GLD), (B),
(NEM), (AEM), (NFLX), (FCX), (TSLA), (SPY), ($VIX), (CATL)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-08-18 09:06:542025-08-18 10:42:19August 18, 2025
april@madhedgefundtrader.com

July 21, 2025

Diary, Newsletter, Summary

Global Market Comments
July 21, 2025
Fiat Lux

 

Featured Trade:

(MARKET OUTLOOK FOR THE WEEK AHEAD, or THE CASE OF THE MISSING TARIFFS)
($VIX), (MSFT), (GOOGL), (META), (SPY), (QQQ), (CSCO), (TSLA), (AMGN), (MSTR), (AAPL)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-07-21 09:04:332025-07-21 10:24:42July 21, 2025
april@madhedgefundtrader.com

July 16, 2025

Diary, Newsletter, Summary

Global Market Comments
July 16, 2025
Fiat Lux

 

Featured Trade:

(WHY TECHNICAL ANALYSIS NEVER WORKS)
(FB), (AAPL), (AMZN), (GOOG), (MSFT), (VIX)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-07-16 09:04:122025-07-16 10:32:50July 16, 2025
april@madhedgefundtrader.com

April 11, 2025

Diary, Newsletter, Summary

Global Market Comments
April 11, 2025
Fiat Lux

 

SPECIAL VOLATILITY ISSUE

Featured Trade:

(TESTIMONIAL)
(MAKING VOLATILITY YOUR FRIEND),
(VIX), (VXX), (XIV),

(THE ABC’s OF THE VIX),
(VIX), (VXX), (SVXY)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-04-11 09:08:572025-04-11 10:10:55April 11, 2025
april@madhedgefundtrader.com

Making Volatility Your Friend

Diary, Homepage Posts, Newsletter

With the Volatility Index back down to a bargain of $16, I am getting deluged with emails from readers asking if it is time to start hedging portfolios one more time and buying the iPath S&P 500 VIX Short Term Futures ETN (VXX).

The answer is not yet, but soon, possibly very soon. And here is the anomaly in the market today. Volatility is not reflecting actual short-term movements in the S&P 500.

While we have seen several 200-point moves in the market in the past three weeks, the volatility Index (VIX) has spent only hours over the $20 level. That is because the ($VIX) measures anticipated 30-day volatility, and for the past 30 days, the overall net move in the market has been zero.

They are inquiring at absolutely the wrong time.

And here is the problem. When the (VIX) rises, it usually spikes straight up, and then right back down again. This time, it spiked but has since hung around the $20 level rather than collapse back down. That suggests that there is another leg up to go in volatility until it hits $50 or more before it takes a much-deserved break. That means the stock market has one more sharp selloff left before we hit bottom and bounce.

Markets can ignore trade wars, rising interest rates, rocketing interest rates, and international political instability (Gaza, Ukraine) for a while, but not forever. When the time DOES come to pay the piper, prices will fall and volatility will rocket.

So I am more than usually interested in hedging the downside risk for my trading book. A good rule of thumb is to let the (VIX) sit at a bottom for a week, and then go buy the (VXX). Two weeks is even better. That way, you can ignore expensive and unnecessary time decay.

Which all brings me to the subject at hand.

If you are new to the service and have no longs, you probably should skip this trade and just watch it as a learning experience.

This can also be a great hedge for any long positions we may want to add in the coming weeks, such as in “trade peace” or technology plays.

As I never tire of telling people, no one ever complains when they buy fire insurance and their house doesn’t burn down.

If you are new to this service, don’t freak out. My daily research newsletters are not always about exploring the esoterica of options, or volatility trading.

I’ll let you know when I’m ready to pull the trigger with a Trade Alert.

I am always trying to get better prices.

If you are new to the (VIX) game, please read the educational piece below.

 

 

 

 

 

https://www.madhedgefundtrader.com/wp-content/uploads/2024/10/John-Thomas-jackhammer.png 1174 812 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-04-11 09:04:532025-04-11 10:10:30Making Volatility Your Friend
Mad Hedge Fund Trader

The ABCs of the VIX

Diary, Homepage Posts, Newsletter

I am one of those cheapskates who buy Christmas ornaments by the bucket load from Costco in January for ten cents on the dollar because my 11-month theoretical return on capital comes close to 1,000%. 

I also like buying flood insurance in the middle of the summer drought, when the forecast in California is for endless days of sunshine. That is what we had at the end of July when the (VIX) was plumbing the depths of $12.

Get this one right, and the profits you can realize are spectacular.

It gets better. 

If the bottom in volatility exactly coincides with the peak in the stock market that it measures, volatility could be headed back up to the 30% handle, and maybe more. 

I double dare you to look at the charts below and tell me this isn’t happening.

Watch carefully for other confirming trends to affirm this trade is unfolding. Those would include a strong dollar, and a weak Japanese yen, Euro, and rising fixed-income instruments of any kind.

Notice that every one of these is happening this week!

Reversion to the mean, anyone?

You may know of this from the many clueless talking heads, beginners, and newbies who call (VIX) the “Fear Index”. 

For those of you who have a PhD in higher mathematics from MIT, the (VIX) is simply a weighted blend of prices for a range of option contracts on the S&P 500 index (SPX).

The formula uses a kernel-smoothed estimator that takes as inputs the current market prices for all out-of-the-money calls and puts for the front-month and second-month expirations. 

The (VIX) is the square root of the par variance swap rate for a 30-day term initiated today. To get into the pricing of the individual options, please go look up your handy dandy and ever-useful Black-Scholes equation. 

You will recall that this is the equation that derives from the Brownian motion of heat transference in metals. Got all that?

For the rest of you who do not possess a PhD in higher mathematics from MIT, and maybe scored a 450 on your math SAT test, or who don’t know what an SAT test is, this is what you need to know. 

When the market goes up, the (VIX goes down. When the market goes down, the (VIX) goes up. Period. End of story. Class dismissed.

The (VIX) is expressed in terms of the annualized monthly movement in the S&P 500 (SPX) which, with the (VIX) today at $10, is at $72.54. 

So for example, a (VIX) of $10 means that the market expects the index to move 2.89%, or $72.54 S&P 500 points, over the next 30 days. 

You get this by calculating $10/3.46 = 2.89%, where the square root of 12 months is 3.46. 

The volatility index doesn’t really care which way the stock index moves. If the S&P 500 moves more than the projected 2.89% in ANY direction, you make a profit on your long (VIX) positions. 

I am going into this detail because I always get a million questions whenever I raise this subject with volatility-deprived investors.

It gets better. 

Futures contracts began trading on the (VIX) in 2004, and options on the futures since 2006. 

Since then, these instruments have provided a vital means through which hedge funds control risk in their portfolios, thus providing the “hedge” in hedge fund.

 

https://www.madhedgefundtrader.com/wp-content/uploads/2017/09/john-pogo-e1506632512231.jpg 467 250 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2025-04-11 09:02:142025-04-11 10:10:21The ABCs of the VIX
april@madhedgefundtrader.com

April 8, 2025

Diary, Newsletter, Summary

Global Market Comments
April 8, 2025
Fiat Lux

 

Featured Trade:

(A REFRESHER COURSE AT SHORT SELLING SCHOOL),
(SH), (SDS), (PSQ), (DOG), (RWM), (SPXU), (AAPL), (TSLA),
(VIX), (VXX), (IPO), (MTUM), (SPHB), (HDGE)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2025-04-08 09:04:532025-04-08 10:41:40April 8, 2025
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There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

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