Lessons From the Last Crisis: Volatility and the VIX

Since its introduction in 1993, the VIX has only closed above 80 during two periods in U.S. market history: the 2008-2009 Financial Crisis and now during the 2020 “Coronacrisis.” The three instances in which the VIX closed the trading day above 80 include: March 16, 2020: 82.69 Nov. 20, 2008: 80.86 Oct. 27, 2008: 80.06 … Continued

Contrarian Alert: British Pound Crashes to 35-Year Lows

The story of the British Pound during the last couple years is a great reminder of how obsessing over one specific anxiety in life can be a huge waste of time, and counterproductive – especially because new problems can pop up at any time which can render that old problem merely an afterthought.  Case in … Continued

Trading Defensively: Managing Tested Positions

With the spread of the novel coronavirus outside of China, the entire world is now wrestling with a very serious threat. Furthermore, many investors are grappling not only with ensuring that they stay healthy, but that their positions—many of which are now being “tested” by the global economy’s response to the pandemic—stay healthy too.  As … Continued

Lessons From the Last Crisis: Gold Stocks

Whenever volatility spikes, as it has dramatically in 2020, some investors and traders park their money in perceived safe havens. While gold is often viewed as one such safe haven, research conducted by tastytrade suggests otherwise—at least as far as how gold prices have historically performed when equity markets are tanking.  The conclusion of that … Continued

ZIRP-NIRP Primer: Will Fed Go From Zero to Negative Rates?

On Dec. 16, 2008, with the world economy overwhelmed by the Global Financial Crisis, then head of the U.S. Federal Reserve Ben Bernanke announced that the American central bank was lowering its benchmark target interest rate to nearly zero. At that point, U.S. stock indices like the S&P 500 were already down roughly 40% from … Continued

The Fed’s Dovish Zero Interest Rate Policy is Back

Coronavirus Updates: The estimated number of total global coronavirus infections has risen to more than 169,930 with at least 6,522 associated fatalities Approximately 3,309 of the deaths linked to the novel coronavirus have occurred outside of mainland China across 47 different countries There are currently 3,782 confirmed cases of COVID-19 in the United States (69 … Continued

Naked Options: High Octane Directional Plays

In 1931 it took the U.S. stock market 15 days to go from highs to bear market territory—the latter term defined as a decline of at least 20%. In February and March of 2020, that same plunge took 19 days, meaning this has been the second-fastest pace in the history of trading to a bear … Continued

Crude Oil Implosion Ignites Natural Gas Rally

Coronavirus Updates: The estimated number of total global coronavirus infections has risen to more than 126,007 with at least 4,614 associated fatalities Approximately 1,456 of the deaths linked to the novel coronavirus have occurred outside of mainland China across 26 different countries There are currently 1,279 confirmed cases of COVID-19 in the United States (37 … Continued

VVIX: Measuring the Volatility of VIX

When the VIX starts ripping, many traders expand their watchlists to include additional volatility products such as VXX, SVXY and UVXY—as outlined recently by luckbox.  Another parameter that tends to draw extra attention during sharp corrections is VVIX. This metric is effectively the “VIX of VIX” as it reports on implied volatility in the VIX, … Continued

Beta-Weighted Portfolio Hedging

“Buy the dip” was so 2019. In 2020, “buy the dip” has been replaced by “trade the churn.” And if 1,000 point swings in the Dow Jones Industrial Average stick around much longer, there will no doubt be a large exodus of passive investors fleeing into the active trading category, eager to join the party.  … Continued