Big volume in SIRF June 7.5 Calls. 7000 have traded already, vs. open interest of 6200 entering the day. Big move in the stock also, up 14%.
Volatility has lifted from 73 to 83, suggesting calls are being net-bought.
Always keep in mind that not all option buying is smart. Not even close. How did those PSUN puts work out so far?
Anyway, more brilliance on the VIX just now. Bill Griffeth teases the feature by saying that each time the VIX has dipped below 20 in the past year, we have been off to the races. I thought he was referring to the market, in which case it was factually wrong. But turns out he meant the VIX was off to the races.
I believe that's what they meant, it was incredibly confusing.
Just to reiterate a couple points.
Nothing magical surrounds a VIX of 20. Yes it is "low" if you define the range of the last year or so as the correct levels. I personally feel that way, but unclear that will prove correct.
They recommended (I think, kind of confusing) VIX calls out to fall.
How about a better and easier idea that actually lines up to the landscape they laid out (renewed troubles in financials)? Buy put paper out 4-8 month's in like SPY or QQQQ or IWM. Not recommending that, just saying it actually hedges a portfolio, not to mention VIX Nov and Sep calls already price in a move back to 23 ON TOP OF the call premium you pay.
7 comments:
Wow..cant believe they are actually allowed to encourage ppl to jump in and buy VIX calls..you might as well grab a surfboard and test the waves with that hunny you have pictured..by the way is the back of Becky Quick I see? lol
Also why in the world is Cramer on just now pushing ppl into gold stocks as they fall off a cliff lately (ok today might be an up day) and you have the IMF dumping 400 tons of it...
well its officially summer vacation for me so I am looking forward to a wild summer trading the markets! oh and adam I love the blog..have been reading it for over a year now and learn a great deal about the option world from your posts..thanks and have a good one.
hey thanks Jason, and enjoy your feedback. Great job recognizing Becky from this vantage point, lol. I guess the giveaway was that Buffett took the pic.
Missed that Cramer. Don't worry, he'll hate them tomorrow if they tick down.
Adam, I was watching when Griffeth said that, and I thought, "God, I hope Adam is watching...he'll about fall off his chair if hears this."
Looks like you did -- watch and fall -- and are none the worse for wear!!
It's funny you mention a chair. The TV here is behind my back, so I stood up and watched the segment, then my wife walks in and wonders why i'm standing in the middle of the room, lol.
Was that not completely confusing? The teaser (and Griffeth's prior wisdom) imply the sub 20 VIX means time to buy stocks. But the guests seemed to recommend buying the VIX. And/or VIX calls. Which makes perfect sense in that it is "low".
Adam, I am guessing that the short side of sirf (at about 20% of the float) is trying to hedge a squeeze. Keep up with the info and photos, always good stuff.
Here's how you can tell if somebody really understands markets and finance.
Can they think in the "obverse?" Credits/short, debits/long.
VIX up/stocks down (sorta). VIX down/stocks calm (sorta).
Well, the VIX is a special case, but then again, special cases are not the forte of the bobbleheads whose "special" expertise, as my wife would say, is "market babble."
"Market babble" is, by the way, an in-bred first cousin of "sports babble" "talk radio babble" and that most babbly of all babbles "political pundit babble."
Thankfully, this is why the Good Lord created noise-cancelling headphones.
aiden: at least the photos.
karl: yeah agreed, of all the incessant babble, political punditry is the most useless.
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