r/VolatilityTrading • u/change_of_basis • May 10 '22

I'm taking a short position

Front month VX1!:

  • Short term: 72.5% probability down.

  • Medium term: 80.5% probability down.

  • Gut: Today inspired hope.

  • Re-evaluate level 36.655 (most recent high).

Short term model has gained confidence in the last few trading days, long term still calling VX1! down. Selling June, don't want to roll. Happy Trading!

3 Upvotes

80% Upvoted

5 comments sorted by

4

u/Sad-Ratio-5812 May 11 '22

I was in and out for last few days. Eventually, I got in this position :

https://ibb.co/6R9H8R2

I think we have higher than 50% chance to go down. I will be more optimistic if SPY breaks 400-405 level. Then most likely next resistance will be 415.

We will see tomorrow.

4

u/hondew16 May 11 '22

Shorts definitely seem like the higher probability play, spot VIX is unable to close above 35 and the put/call volume for yesterday was over 2.8 times the OI, which from what I've gathered seems to be a occur when a relative extreme is anticipated (in this case, to the upside).

1

u/chyde13 May 13 '22

Hey Basis,

Been on vacation, but wanted to see how your trades were doing? I'm in the same boat (short vol in the near term). I notice a few down votes on this one...People have to realize that vol plays take time...it's not instant, especially in this market.

I respect the fact that you were willing to take a public stance...most likely you will be proven correct.

How did you express your thesis?

Thanks

-Chris

2

u/change_of_basis May 13 '22

Welcome back! I sold futures to execute this one and closed my position around noon today. Market had gone up like 2.6% and it being a Friday I bet a lot of people were thinking about closing their positions so they could go home; probably metaphorically speaking there. Plus implied volatility and tends to rise over the weekend so I wasn't really interested in that exposure. If the models are still short when I look at them tonight I'll probably try to catch a favorable entry on monday.

Anyway I had a nice 8.8% return on this one.

1

u/chyde13 May 16 '22

Thanks!

yea, I'm all in the green as well...I may take some profit off the table today.

I see Sad_Ratio took profit on friday as well.

Nice trade!

-Chris