Options Trading News

October 17, 2013  Thu 1:16 AM CT

Equity indexes were all higher yesterday Washington seemed to finally come to its senses with a budget agreement, sending the CBOE Volatility Index to one of its biggest drops ever.

The S&P 500 was up 23.48 points to finish the session at 1721.54, just a few ticks off its all-time closing high of 1725 set on Sept. 18. It now has support at 1660.

The Nasdaq 100 gained 37.01 points to 3281.67, its highest close in 13 years. It has support at 3150.

The Russell 2000 gained 12.80 points to a new all-time closing high of 1092.42. It has support at 1042.

(When equity indexes are at highs, further resistance levels are obviously projections not based on previous trading patterns. We therefore will refrain from listing any.)

The VIX plunged 3.95 points, or 21.17 percent, to 14.71--one of the top 10 percentage declines ever seen in the volatility index. It is now back to levels of Sept. 27, interestingly when the SPX was 30 points lower. The VIX is now below the short-term actual volatility, as the 10-day rate for the SPX is 17.5 percent.

The VIX futures followed lower, with the October contracts settled at the open at 17.21. The November futures fell 1.75 points to 15.55, and the December futures were down 1.10 points to 16.55. That had the iPath S&P 500 VIX Short-Term Futures Note (VXX) down 11.5 percent to $13.77.
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