Volatility Views

Volatility Review - Jan VIX futures volume down size from 2017 - Overview of Hot VIX options positions - Overview of interesting VIX options trades - Will there be an end-of-day selloff in VIX futures from VXX - First look at hot VXXB options positions - Earnings Volatility Overview: AMZN, MSFT, FB, QCOM, AAPL and more Volatility Voicemail - Why is the market so slow to adopt VXXB - Can market makers see if your spx or vix order is open or close - and more Crystal Ball The Meatball finally wins. This weeks' picks: Mark L. - 17.05 Mark S. - 15.25

Today Mark and Mark discuss:

Volatility Review Segment

• VIX and VVIX relatively unchd. from last week.
• VIX futures still weirdly flat
• VIX options volume still relatively anemic
• VXX options love switching to calls
• How will the Shutdown Deal impact volatility?

Earnings Volatility Review

We discuss:

• INTC
• SBUX
• XLNX
• JBLU
• and more

Volatility Voicemail

We answer you questions about INTC volatility, ratio 1x2 spreads and more.

Crystall Ball Picks

• Mark L. - 17.25
• Mark S. 16.25

Volatility Views 338: Boulevard of Broken VXX Dreams - Host: Mark Longo, CEO - Options Insider Media Group - Co-Host: Mark Sebastian, Founder - OptionPit.com

Volatility Review - Major indices up nearly 1.5% across the board with volatility taking a bath. - Mark and Mark break down the legion of Jan VXX puts that will expire worthless this week.

Volatility Voicemail - We answer your questions about VIX 1x2 verticals, VXX sadness, Powell puts and more...

Crystal Ball - Our picks for VIX next week: Mark L. - 17.25 Mark S. - 16.25

VOLATILITY VIEWS 337: Looking At VIX From A European Perspective

- HOST: MARK LONGO, OPTIONS INSIDER MEDIA GROUP - SPECIAL GUEST CO-HOST: AASH VYAS, PORTFOLIO MANAGER - TUNGSTEN INVESTMENT FUNDS

VOLATILITY REVIEW SEGMENT VIX STILL EERILY FLAT - HOVERING AROUND 20 LEVEL. MARK/ANDREW VOLATILITY REVIEW - WHICH VOLATILITY TRADES, TRENDS OR DEVELOPMENTS CAUGHT YOUR EYE THIS WEEK?

VIX CASH 19.25 - 3.5 PTS LOWER THAN LAST SHOW

VVIX 85.5 - 4.5 PTS HIGHER THAN LAST SHOW

VIX FUTURES CURVE STRANGELY FLAT FRONT MONTH: .4PT PREMIUM TO CASH 2ND MONTH: .65 PT PREMIUM TO CASH

VIX OPTIONS TODAY - 215K ADV - 584K NEARLY UNCHD FROM LAST SHOW

TOP VIX POSITIONS 327336 .VIX Feb 13th 37.5 C, chg -2140 245513 .VIX Jan 16th 30.0 C, chg -243 213192 .VIX Jan 16th 35.0 C, chg -24 209890 .VIX Feb 13th 40.0 C, chg +175 170651 .VIX Jan 16th 32.5 C, chg -380 164631 .VIX Apr 17th 45.0 C, chg +2463 156643 .VIX Jan 16th 18.0 P, chg +571 153838 .VIX Apr 17th 70.0 C, no chg 144909 .VIX Feb 13th 35.0 C, chg +3900 140853 .VIX Apr 17th 37.5 C, no chg 138566 .VIX Mar 19th 37.5 C, chg -3 135504 .VIX Jan 16th 24.0 C, chg -308 132670 .VIX Jan 16th 15.0 P, chg +292 131605 .VIX Jan 16th 16.0 P, chg +3575 124540 .VIX May 22nd 37.5 C, no chg 122430 .VIX Jan 16th 25.0 C, chg -3957 121452 .VIX Mar 19th 40.0 C, chg -286 121369 .VIX Feb 13th 30.0 C, chg +29260 116491 .VIX Jan 16th 19.0 P, chg +2240 116019 .VIX Jan 16th 20.0 P, chg +3823 Total 8.63m (6.41m Calls, 2.22m Puts)

HOT VIX OPTIONS TODAY FEB RR/STRANGLE? POTENTIALLY CLOSING? 15000 VIX Feb 13th 45.0 Calls $0.12 (FT Theo=0.09) EDGE=0.03 ASK CBOE 09:39:32.942 IV=136.3% -0.9 CBOE 59k x $0.05 - $0.15 x 62k CBOE SPREAD VIX=20.25 Fwd 122%OTM Detail ContractHist 15000 VIX Feb 13th 16.0 Puts $0.27 (FT Theo=0.26) EDGE=0.01 MID CBOE 09:39:32.941 IV=72.8% +3.6 CBOE 24 x $0.25 - $0.3 x 54k CBOE SPREAD VIX=20.25 Fwd 20%OTM Detail ContractHist

11660 VIX Mar 19th 30.0 Calls $0.64 (FT Theo=0.63) EDGE=0.01 MID CBOE 10:56:38.471 IV=86.0% -0.6 CBOE 27k x $0.6 - $0.7 x 43k CBOE SPIM VIX=20.08 Fwd 49%OTM Detail ContractHist

VXX 40 - 4 PTS LOWER THAN LAST SHOW TODAY - 121K ADV - 273K

VXX TOP POSITIONS 203693 VXX Jan 10.0 P, no chg 82235 VXX Jan 15.0 P, no chg 70226 VXX Jan 5.0 P (Nonstd VXX2), no chg 65901 VXX Jan 33.0 P, chg +53 53317 VXX Jan 20.0 P, no chg 51873 VXX Jan 25.0 P, no chg 51826 VXX Jan 50.0 C, chg +14 47328 VXX Jan 30.0 P, chg -38 39767 VXX Jan 50.0 C (Nonstd VXX2), no chg 39578 VXX Jan 52.0 C, chg +22 39265 VXX Jan 40.0 P, chg +549 34849 VXX Jan 35.0 P, chg +92 33589 VXX Jan 18.0 P, no chg 32999 VXX Jan 31.0 P, no chg 32052 VXX Jan 32.0 P, no chg 32000 VXX Jan 28.0 P, chg -1 28451 VXX Jan 35.0 C, chg +8 28171 VXX Jan 27.0 P, no chg 28100 VXX Jan 60.0 C (Nonstd VXX2), no chg 26737 VXX Jan 37.0 P, chg -629 Total 2.41m (1.06m Calls, 1.35m Puts)

VXX TOP TRADES 4829 VXX Jan 39.0 Puts $0.80 (FT Theo=0.81) EDGE=0.01 ASK [MULTI] 11:45:32.979 IV=59.4% +0.7 CBOE 204 x $0.79 - $0.8 x 1167 ISE VXX=40.13 2%OTM Detail ContractHist

2430 VXX Jan 59.0 Calls $0.03 (FT Theo=0.01) EDGE=0.02 BID [MULTI] 12:23:07.285 IV=123.2% +11.1 AMEX 1822 x $0.03 - $0.04 x 1029 GEMX VXX=39.82 Ref 48%OTM Detail ContractHist

SVXY 46 - UNCHD FROM LAST SHOW

VOLATILITY VOICEMAIL *QUESTION FROM JLVC: What's the vol crew predicting for 2019?

*QUESTION FROM JT: Any new year's resolutions for vol traders?

*QUESTION FROM TONTAN: So is the short vol, vix trade dead? Should we all just buy vix or vxx calls?

*QUESTION FROM E5L4: Not looking good for the 200k jan 10 puts in VXX.

*QUESTION FROM LROCK3: Is there an update on spikes launch?

CRYSTAL BALL WHERE WILL VIX BE THIS WEEK? WINNER - MARK L. with 19.25? LOSER - The Greasy Meatball with 17.50?

WHERE WILL VIX BE NEXT WEEK? MARK: 19.25 GUEST: 17.5 AASH VIX CLOSE 2019 PREDICTION IS 22

Volatility Views 336: Kicking off 2019 With Some Volatility

• Host: Mark Longo, CEO & Founder - The Options Insider Media Group
• Co-Host: Mark Sebastian, Co-Founder -OptionPit.com, Portfolio Manager - Karman Line Capital

VOLATILITY REVIEW

• Massive jobs report - The economy added 312k jobs in Dec, although unemployment is up to 3.9% Powell's speech apparently didn't save the market too much.
• VIX Cash - 22.75, nearly 6-points lower than last show.
• VVIX - 81, 14-points lower than last show.
• VIX Options - ADV: 586k, Total 7.49m (5.71m Calls, 1.78m Puts)
• VXX - 50, 4-points higher than last show.
• TOP VIX POSITIONS - ALL CALLS - FIRST TIME IN AGES 331732 .VIX Feb 13th 37.5 C, chg +1807 244006 .VIX Jan 16th 30.0 C, chg +2028 200570 .VIX Jan 16th 35.0 C, chg -4014 166294 .VIX Jan 16th 32.5 C, chg +4868 161664 .VIX Feb 13th 40.0 C, chg +1486 160240 .VIX Apr 17th 45.0 C, no chg 153836 .VIX Apr 17th 70.0 C, chg +110 138616 .VIX Mar 19th 37.5 C, chg +10 135993 .VIX Jan 16th 24.0 C, chg -128 135869 .VIX Feb 13th 35.0 C, chg +3579 133744 .VIX Apr 17th 37.5 C, chg +534 132348 .VIX Jan 16th 15.0 P, chg -1 127371 .VIX Jan 16th 18.0 P, chg -6623 127070 .VIX Jan 16th 16.0 P, no chg 121718 .VIX Mar 19th 40.0 C, chg -4 114484 .VIX Jan 16th 25.0 C, chg +2019 114106 .VIX Jan 16th 20.0 P, chg +5384 102166 .VIX Mar 19th 35.0 C, chg +4 101408 .VIX Jan 16th 27.0 C, chg -563 100573 .VIX Jan 16th 37.5 C, chg +4451 Total 7.49m (5.71m Calls, 1.78m Puts)

AAPL VOL IN THE SPOTLIGHT

• AAPL CRUSHES MARKET WITH RARE REVISION TO GUIDANCE. BIGGEST SINGLE DAY SELLOFF IN APPLE IN OVER A DECADE

Those $AAPL Jan 150 puts that everyone sold in our last poll for $2 are now ITM. So our question is - what do you do now? Do you keep the stock around $148? Sell covered calls to "wheel out?" Roll or close the position? Let us know here.

• Happily buy $AAPL at $148
• Wheel out w/Covered Call
• Roll put Down
• Close position
• Vote Now at www.Twitter.com/Options

CRYSTAL BALL

Our mega 2019 Crystal Ball Prediction Contest is underway. Many of you have already participated. Here's a few of your predictions for the closing price of VIX in 2019:

• WHERE WILL VIX BE AT THE CLOSE OF 2019?

• ROCKLOBSTER- 16.01, 14.99

• Mark L. 17.10 - AVG FOR YEAR 17.60

• Greasy Meatball: CLOSE - 12.04, AVG. 14.05

• akatz000: 31.5. I think we've got one more down day to round out 2018. Then again, I had just started trading vol and was holding XIV on Volpocalypse, so what do I know

• Neil Wales - 13.3

• contango - 12.14

• Mail Man Dan - 12/31 closes at $257.50 on $SPY and $VIX at $22.50

• Brad Huff - 27.25

• Filip (FContangotrader) - 32.4

• Matt Thompson - 18.03

• Ahmed Sharif - Feels 3 cents too high to me

• Pat Hennessy - 21.52

• David Lincoln - 16.90

• Bill Luby - EOY 2019 $VIX guesstimate: 15.83

• Ophir Gottlieb - 25.42

• Andrew Nightingale - 32

• Andrew Giovinazzi - 16.1

• Trading Volatility - 24.3

• Steve Place: armageddon, end of world, plagues and locusts, markets close, 0 percent vol, checkmate

• Volatility Trading: 17.50 2019 average with a 14.50 VIX at year end

• Pat Hennessy, CMT: Proposing another form of this question. What will the average VIX (based on daily closes) be in 2019? Chart attached for reference of past years….My guess is 19.27...oh and dont hit me about "average VIX" issues

• Zaphod: I wasnt sure what they meant and like this way. Have to drop in q1 from here, shenanigans/earnings, Mueller, settling/boredom....dont think we spend a lot of time below 16....so 21.35 as some spikes weigh on the average. No clue in reality ofc.

• filip: Close your eyes and BTFD

• Andrew Nightingale, CFA: 32

• Jay Soloff: First half of 2019 average = 28, second half =16, but I think the lower prints outweigh the higher prints so we end up with an average like 18.5. Do not question the rigorous maths I used to come up with that number. It's proprietary and may involve an abacus and rye toast.

• David Lincoln: 16.90, 17.9 for the average…

• Trading Volatility: 24.3...Low of 17.6 and high of 63.2

• Barton: Great chart. My guess is 25% between 2007 and 2008 levels. 17.54 X.75+32.69 X .25 = 21.33….I would have guessed half way between 2007 and 2008, if we did not have the systematic short vol crowd.

• Matt Thompson, CFA: 18.03….Agree that's a better metric. End of year, you are really just guessing what is gonna happen in Dec...My 2019 average guess is 24.88

• f ili p: $vix 32.4

• Contangoking: 12.14

• Next week VIX Pick:
• Mark L. - 19.25
• Mark S. - 17.50

VOLATILITY REVIEW

VIX Cash - 28, nearly 6-points higher than last show.

VVIX - 95, 10-points lower than last show.

Mnuchin Blames Volcker Rule, High-Speed Trading for Volatility - https://www.bloomberg.com/news/articles/2018-12-18/mnuchin-blames-volcker-rule-high-speed-trading-for-volatility

VIX Options - 575k, Total 6.73m (5.24m Calls, 1.50m Puts)

VXX - 50, 4-points higher than last show.

2018 Theme - The Year That Vol Returned, aka the year we got the real Trump administration

CRYSTAL BALL

Final #QOTW for 2018 - It's the big one! Time to play along w/ #VolatilityViews and dust off your #CrystalBall. Quite simply - where do you think $VIX will close for 2019? Bonus points: Reply/DM/Email w/ your specific pick. Closest (within 1pt) will win Fabulous Prizes.

- Low: 8-11.99

- Normal: 12 -16.99

- Elevated: 17- 23

- Very Elevated: > 23

Twitter Guesses:

Neil Wales - 13.3

Contango - 12.14

Mail Man Dan - 12/31 closes at $257.50 on $SPY and $VIX at $22.50

Brad Huff - 27.25

Filip (FContangotrader) - 32.4

Matt Thompson - 18.03

Ahmed Sharif - Feels 3 cents too high to me

Pat Hennessy - 21.52

David Lincoln - 16.90

Bill Luby - EOY 2019 $VIX guesstimate: 15.83

Ophir Gottlieb - 25.42

Andrew Nightingale - 32

Andrew Giovinazzi - 16.1

Trading Volatility - 24.3

Us:

Andrew - 16.01, Avg: 14.99

Mark L. - 17.10, Avg: 17.60

Volatility Review: A look at last week from a volatility perspective.

• VIX Cash - 26.5, nearly 4-points higher than last show.
• VVIX - 105, 8-points higher than last show
• Mnuchin Blames Volcker Rule, High-Speed Trading for Volatility
• VIX Options - ADV: 575k down nearly 20k from last show. Total 5.50m (4.23m Calls, 1.27m Puts)
• VXX - 46, 6.5-points higher than last show.
• SVXY - 43, almost 3 handles lower than last show.

Volatility Voicemail: Options question of the week

Which upcoming volatility product are you most excited about trading in 2019? Or are you content to stay with the original despite lingering issues?

• SPIKES
• Realday/RealVol
• Voldex/Skewdex
• I'll stick with VIX

Comments, questions, and musings:

• Mark Twain on Volatility - "October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February." -Mark Twain
• Comment from Pat Hennessy - There are a total of 6,600 $VIX Dec puts that will be ITM if the VIX settles above 24. 1.66 million VIX puts will expire totally worthless. This represents over 64% of all open VIX puts. Thanks for playing. Better luck next time.
• Question from JLVC - What's the vol crew predicting for 2019?
• Question from Sangfrois - Why no options on $TVIX?

Crystal Ball: Wild and reckless prognostication

Last week:

• Mark L. - 19.25
• Mark S. - 27.25

This week:

• Mark L. - 23.45
• Mark S. - 28.85

Volatility Review: A look back at the week from a volatility perspective

• What exactly is afoot?
• VIX cash
• International volatility trends: France for the win!
• Volatility opportunities
• 1-by-6 fever?
• Aggressively naked
• Take the money and run

Volatility Voicemail: Options questions of the week

Everyone loves trading AAPL Options. So the open interest is always very high. But a few interesting options dominate the rest. What do you think is the largest open position in AAPL right now? No cheating - try to use your #SpideySense.

• Jan 2020 200 Call
• Jan 250 Call
• Dec 180 Put
• Jan 100 Put

Listener questions and comments:

• Question from F96 - Is there a listed equivalent to trading a variance swap? If not what's the closest approximation?
• Question from T-Bags - Which new volatility product are you most excited about for 2019?

Crystal Ball: Wild prognostication

Last week:

• Mark L. - 18.65
• Mark S. - 23.00

This week:

• Mark L. - 19.25
• Mark S. - 27.25

Volatility Review: A look back at the week from a volatility perspective.

• VIX Cash - 22.65, 3.25 higher than last show
• VVIX - 97, 3-points higher than last show
• VIX Options - ADV: 594k - up nearly 50k from last show

Hot VIX options today:

• 10000 VIX Feb 13th 17.0 Puts $1.025
• 3999 VIX Dec 12th 30.0 Calls $0.10
• 42800 VIX Dec 19th 40.0 Calls $0.14
• 37700 VIX Jan 16th 32.5 Calls $0.562

Plus:

• VXX - 35.5, 1-point lower than last show
• SVXY - 46, almost 4 handles lower than last show

Volatility Voicemail: Listener questions and comments

• Question from DaNincompoop - Are the futures really backward if it's just the cash that's higher?
• Question from Charles Pierce - When does VXX make the switch to VXX B?
• Question from ELanc3 - Over-under on when we'll see the next crop of new inverse volatility ETFs?

Crystal Ball: Wild prognostication ensues

Last week:

• Mark L. - 17.65
• Mark S. - 16.49

This week:

• Mark L. - 18.65
• Mark S. - 23.00

Volatility Review: A look back at the week from a volatility perspective.

• VIX Cash - 19.4, almost unchanged from two week ago
• VIX - 94, 12-points lower than last show
• VIX Options - ADV: 546k, Total 6.77m (4.81m Calls, 1.95m Puts)
• VXX - 35.5, 1-point lower than last show
• Crypto crushed below $4k recently

Volatility Voicemail: Options question of the week:

AAPL continues to take a beating - recently dropping below $175. We know many of you LOVE to trade $AAPL and this selloff creates opportunities. Looking ahead to Jan 2019 expiration- which trade would you prefer to make in $AAPL right now?

• Sell Jan 150P for $1.65
• Buy Jan 150P for $1.65
• Sell Jan 200C for $1
• Buy Jan 200C for $1

Listener questions and comments

• Comment from Pete Yarbro - I'd sell this strangle.
• Question from EELC5 - What's the lowest volatility can get in the SPX?
• Comment from Nilai - I like Mark's idea for an erosionator in VXX. Would be something interesting to watch. Kind of like a smog report or tide report but for VXX.

Crystal Ball: Wild and reckless prognostication.

Two weeks ago we asked people to guess where VIX would close on 11/30 by the end of the show. Answer: 18.80

• Mark L.: 18.15
• Mark S.: 15.25
• R Ray: 19.70 -.9
• Richie Rich: 17.1
• Alex P: 17.50
• William Valentine: I'm going with 16-ish. (I'll define the margin of -ish next Friday).
• Ophir Gottlieb: 19.23 - Vol is too cheap for a number of names and buying one-two day straddles is printing money. This is one of the best trading environments for vol in 5 years.
• MRTOPTICK: 19.87
• Neil Wales: 18.1 - .7
• ConTango: 15.09
• Andrew Giovinazzi: 15.91
• David Lincoln: 16.50
• Jim Carroll: I'll take 14.90 cuz bears will take a break before they try again...Just wanted to take the under! Come at me!!!!!!
• Matt Thompson, CFA: 18.71056
• Cmcapone: Kind of late, but for the 11/30 prognostication contest, put me down for 18.80.

This week:

• Mark L. - 17.15
• Mark S. - 16.35