Opinions
Hap (Robert) Sneddon FCSI
CBOE Volatility Index
VIX-I
SELL
Apr 04, 2025
N/A
Stock price when the opinion was issued
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COMMENT
Putting a butterfly spread on the VIX? This spread is sometimes called the Iron Condor, and you are putting the spread on in 4 different ways. Unless you are a very, very sophisticated option trader, you might as well set your money on fire and throw it in the air. You are going to be eaten alive by the market makers.
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COMMENT
From day to day, it will be very choppy. Volatility is telling him we are in a bear market. Not down 20% yet, but over the next 6 months, we will see the US stock market below 20% its peak. Canadian market is a different situation with exposure to energy and commodities. Won't see such a large correction. However, TSX didn't get as much of the upside.
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It's another indicator that tells us about nervousness by sensing volatility. If you own the VIX, this is probably a really good time to sell. It's right at the peak that we saw last August.
It's a background thing, not a way to perfect timing. Tells you the neighbourhood you're in, but doesn't tell you what to do. You can look at these moves in terms of standard deviations, and how far away from the average we are. Moves of 2 or 3 don't sound big, but they're actually quite big in terms of deviation from the average.