Posted on 03/09/2020 10:50:28 AM PDT by Oldeconomybuyer
Trading in options on Wall Street’s fear gauge was impossible in the first minutes of Monday’s session due to a complete absence of prices from the market makers on whom trading depends, a representative of index operator CBOE Global Markets Inc (CBOE.Z) said.
CBOE Senior Trade Desk Specialist Ryan Stone told Reuters that VIX options were tradable at 9:51 am ET (1351 GMT) but a lack of liquidity led to a lag of about seven minutes until the first trade, around 9:58 am ET.
The VIX surged after trading resumed to its highest level since December 2008 after trading in the S&P 500 was halted for 15 minutes following its open as panic selling due to the spreading coronavirus triggered circuit breakers.
(Excerpt) Read more at reuters.com ...
Created by the Chicago Board Options Exchange (CBOE), the Volatility Index, or VIX, is a real-time market index that represents the market's expectation of 30-day forward-looking volatility.
Derived from the price inputs of the S&P 500 index options, it provides a measure of market risk and investors' sentiments. It is also known by other names like "Fear Gauge" or "Fear Index."
Investors, research analysts and portfolio managers look to VIX values as a way to measure market risk, fear and stress before they take investment decisions.
https://www.investopedia.com/terms/v/vix.asp
The fear was so bad, even the fear gauge wasn’t working!
WTH? I thought it had to be like @ 100 before that happened?
VIX seems to fluctuate between 15-20 and absolute panic. I’ve thought about buying when it’s low (not now!)and just holding to the next panic. Anyone see any problem with that idea?
You are kidding, yes? :)
Just a crazy idea idea I’ve had. I remember several times over the last year or so seeing VIX down as low as 13. I keep thinking about buying a relatively small amount at those levels and just sit on it until it spikes above 30 which it seems to do at least once or twice each year. Certainly wouldn’t bet the farm on it.
You buy at high vix usually. It means everybody is capping their pants.
It froze because everyone was buying short term options.
I bought some VXX options at 3.85 on Friday. At the open, the bid was 14.50. There were no takers. I was finally filled selling at $9.50. It took several minute because you cannot “market” sell for the first 3 or four minutes.
So, that market froze up because everyone expected it to crash “up”. It cleared out quickly.
Then I bought some VXX puts because the cat was falling so hard, it’s gonna bounce. Gonna make another 20% this morning. These morons are making it easy this week.
IC, thanks & good luck!
The VIX is a derivative of trading in S&P 500 index options.
If trading is halted there are no inputs to calculate the VIX.
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