Welcome to this week’s newsletter and my apologies for missing the past few weeks. You can expect this newsletter on Monday’s every week moving forward. The theme remains the same, we discuss macro and big picture and work our way down to trade idea generation.
The Big Picture
This week is all about volatility expansion. We have seen VIX and implied volatility collapse over the last two weeks as the market rallied over Fed’s comment of “no signs of recession just yet” despite yield curve inverting.
As you know VIX and SPY often move in the opposite direction. VIX collapsing has set the stage for a beautiful rally in most indices.
Option Trades for the Week
Despite volatility collapsing, I am still skeptical of the rally and believe volatility should expand over the next few weeks. As an option trader, I like to focus on the fact that I can place a bet solely on volatility and ignore directions. With keeping that theme in mind, below are my trades going into next week. Note some are in the red and some are doing very well.
You will find below for your reference a listing of all of my trades.
Tweet of the Week
Elon is now building a position in Twitter. One thing to note though is that his filing (13-G) shows that he is planning to be more of a passive investor rather than an activist aiming to change the business model and cost structure. Too soon to say but this was definitely an interesting move by Elon.
One Last Thing: New Articles and I am Now on Twitter!
Over the last few weeks I published two articles on medium on hedging and inverted yield curves. Both articles use data and facts to show what has been the best hedge in this market and whether or not inverted yield curve is a big deal this time around. You can check them out by clicking on the links.
I am also now on twitter! Let’s connect there as well for more of a dialogue.
To your success,