Options Trading News

July 9, 2013  Tue 12:45 AM CT

Further gains in the major equity indexes drove volatility lower again.

The S&P 500 rose 8.57 points to 1640.46, its highest close since June 18. The SPX has been on a run since  bouncing off 1560 two weeks ago. Resistance is at 1652 and 1670, while support is at 1573.

The Nasdaq 100 gained 2.91 points to finish at 2966.13. The index has seen a similar pattern that of the S&P 500. Resistance is at 3000 and support at 2900.

The Russell 2000 was up 3.86 points to post a record closing high of 1009.24. Support is at 980.  

The CBOE Volatility Index fell 0.11 points to 14.78, its lowest close since May 30. That is especially interesting because the VIX usually shows relative strength on Mondays, reflecting the weekend time decay in the SPX options on which the volatility index is based.

The VIX futures declined across the board, with the July contracts losing 0.60 points to close at 15.35 and the August futures down 0.70 points to 16.75. This had the iPath S&P 500 VIX Short-Term Futures Note (VXX) down 4.46 percent to $18.21. It has closed lower only once, on May 17 at $18.03.

The VXX options once again outpaced those of the VIX, taking the No. 3 spot in total option volume with 448,000 contracts, 256,000 of which were calls. The VIX options turned over 357,000 times, with 197,000 calls. The VVIX Index, which measures the implied volatility of those VIX options, was down 2.5 percent to 75.49--not far off its all-time low from February.
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