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Created on: 1/17/2021 5:01:31 PM   Last Update: 1/17/2021 5:29:10 PM Posted by: RTT
1 POST Why did selling SP500 volatility trades blow up?
why-did-selling-sp500-volatility-trades-blow-upMany have made their fortunes selling volatility premium and then losing it, that is because they are running down the lit fuse and not understanding that eventually the strategy blows up.

In the chart below periods marked with A, B, C, D are periods of chasing yield which was so great the selling of option premium became vogue. Yes, this strategy worked for a while and 'this time was different' worked, until it didn't.

Selling volatility work great during period gray A until the cycle ended at red A.
Selling volatility work great during period gray B until the cycle ended at red B.
Selling volatility work great during period gray C until the cycle ended at blue C.
Selling volatility work great during period gray D until the cycle ended at blue D.

The point is if you play the selling volatility game, know thy cycle. Cycles matter!. The dominate cycles below gave you plenty of time to go to side lines when risk became apparent. 

NOW >>What is interesting is gray E, VIX is above 20, and the red cycle is rising with the blue cycle is pending a swing up which suggest we are in a pending crisis moment (deflation shock). 

IDEA: Have cycles studies in you investing plans, mix them with sentiment and market fundamentals.




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VIX



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Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, Cycles, Wyckoff and Ney logic is the best way to ride the change, after all these methods have been used successfully for 70+ years. This post is a delayed and small sample of what is avaliable to members. Sign up to enjoy the full service.

NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net

Investing Quote...

.."Every movement in the market is the result of a natural law and of a Cause which exists long before the Effect takes place and can be determined years in advance. The future is but a repetition of the past, as the Bible plainly states"..

William D Gann


..“The main purpose of the stock market is to make fools of as many men as possible”..

Bernard Baruch



..“Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars.”..

Bernard Baruch


..“The key to successful investing is having everyone agree with you — LATER.”..

Jim Grant

Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.

Nobel Laureate for Economics Paul Samuelson




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