7 Comments
Sep 16·edited Sep 16Liked by Alyosha

"No wonder the blob keeps trying to start another!"

I've come around to appreciating "muscle memory" as a somewhat predictable driver of certain, hit-and-run type rallies.

"I’d like to suggest a 4-day weekend preceding every FOMC meeting. There’s really no point in getting everyone to gook at a dead screen for two whole days waiting for 10 minutes of algo madness that no one can trade."

Too funny and also not funny. This time around I'm trying something different: NVDA puts and VIX calls into FOMC and maybe a day or two after. So far it feels very cathartic.

Derek

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Sep 16Liked by Alyosha

Isn’t there something about Markets tending to Zig, when we’re expecting a Zag?

Place your bets. 🔮

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This is what makes being long VIX products attractive in periods of heightened volatility, IMO. They enable you to place a bet on the zig-to-zag ratio (instead of zig OR zag), at low cost and with little risk since they're mean-reverting.

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but you have to hedge your deltas or they melt. I have found. You can't fall in love with one side or the other.

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Interesting. What time frame are we talking about here? Usually I'm buying when nobody wants them and selling them when they're hot again, and not paying much attention to deltas since we're talking a matter of days.

For longer time frames...calendar spreads, but being short VIX isn't conducive to sleeping well at night, at least for me. However, buying SVXY the afternoon of 8/5 was a very lucrative trade. Those are once a year opportunities.

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I assumed you were talking abt 25/ 50 delta short dated cheapies in front of the 2 PM announcement. Long premium of course. I have no clue how to trade both sides of flat price going into an FOMC presser although I once did a study of 5 min average true range following crude stats back in the day when DOEs were hot on wednesdays. Putting resting orders outside the wings. I either didn't get filler or I got run over!! lol.

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If the 🐿️ is ever awake for FOMC or economic releases like CPI, it is only because he got up to pee! As you say JJ no point in watching 10 minutes of untradeable market action.

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