Options Trading News

October 9, 2013  Wed 2:44 AM CT

Equity indexes sold off sharply yesterday, driving the CBOE Volatility Index to its highest close of the year.

The S&P 500 was down 20.67 points, or 1.23 percent, to close at 1655.45. It finished at the low of the day for its lowest close since Sept. 6. It has resistance at 1729 and support at 1630.

The Nasdaq 100 plunged 61.83 points, or just shy of 2 percent, to close at 3153.87. It has resistance at 3256 and support at 3060.

The Russell 2000 lost 18.53 points, or 1.74 percent, to finish at 1047.26. It has resistance at 1087 and support at 1010.

The VIX was up 0.93 points, or 4.79 percent, to 20.34--its highest since the end of 2012. The last time the VIX closed higher, the SPX was down at 1400. The volatility index was as high as 21.01 with less than 2 hours to trade. It is now substantially higher than actual volatility, which is around 10 percent.

The VIX futures followed, but remain lower than the spot index. The October futures were up 0.90 points to 19.40, which brings it above the next three futures in a rare occurrence. The November futures were up 0.75 points to 19.10. That had the iPath S&P 500 VIX Short-Term Futures Note (VXX) up 4.63 percent to 16.96.

The VIX options set a volume record with more than 1.7 million traded, more than 1.1 million of which were calls. the VVIX Index, which measures the implied volatility of the VIX options, was up 3.47 percent to 106.55. It is up 50 percent in the last two weeks.

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