Options Trading News

January 9, 2013  Wed 1:16 AM CT

It was another day of red, with stocks and the CBOE Volatility Index closing lower.

The S&P 500 was down 4.74 points to close at 1457.15. The index had been as low as 1452 before midday but steadily climbed through the afternoon. Support remains at 1420 and resistance at 1475.

The Nasdaq 100 was down 5.5 points to 2718.72. It followed the same pattern as the SPX, falling below 2704 and then regaining much of that ground. Support and resistance remain at 2670 and 2785 respectively.
The Russell 2000 lost just 1.10 points to finish at 874.7, only about 5 points off last week's all-time high. A first level of support will likely be around 853, while resistance is at 880.

The VIX and the SPX usually move inversely, but yesterday the volatility index fell along with the stock market. It was down 0.17 points, or 1.23 percent, to close at its session low of 13.62 after spending much of the morning above 14.

The only time the VIX closed lower in the last five years was on Aug. 17. But that was before a weekend, which has a depressing effect on the volatility index.

The VIX futures finished the day mixed. The January contracts fell 0.10 points to 14.65, but both the February and March futures were up 0.05 points, to 16.59 and 18 respectively.

The action left the iPath S&P 500 VIX Short-Term Futures ETN (VXX) lower again. It set another all new low of 27.09 and a record low close at 27.18, down 1.24 percent.

The VIX options were second on the total volume list with another strong day at 736,000, led by more than 536,000 calls. The VVIX Index, which measures the implied volatility of the VIX options, was up 2 percent to 78.37.
Share this article with your friends

Related Stories


Videocast: Volatility levels decline

October 6, 2015

Group One's Jamie Tyrrell says volatility trading today is implying that the type of VIX action from August and early September will not repeat itself.


Video: Traders see elevated VIX

October 5, 2015

Even with the volatility index falling below 20 today, Group One's Jamie Tyrrell says traders are buying calls and selling puts in the VIX.


Videocast: Target 35 level in VIX

October 2, 2015

Group One's Jamie Tyrrell says traders are targeting the 35 level for the volatility index in October, November, and December contracts.


Video: Traders sell VIX premium

October 1, 2015

Although the spot VIX remains elevated, Group One's Jamie Tyrrell says implied volatility is "pretty normal" for October.


Video: Sharp moves seen in VIX

September 30, 2015

Group One's Jamie Tyrrell says an October 23.50 straddle traded for about $5, indicating that a big move is expected in volatility levels.

Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

View more education articles »