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Michael Douglas and Andy Garcia star as NYC detectives in Japan in Ridley Scott’s film Black Rain. Japan’s Nikkei 225 index is lower now than when Black Rain premiered in 1989 (still image via Ace Black Movie Blog).
(more…)I have mentioned many times my puts in XME. I have mentioned just as many times how godawful slowly the thing moves. Thus, I bought March puts, to give me tons of time, although I think the ultimate move could be two or three years away.
The biggest options position of my life is all about XME (the metals & mining ETF). This beast moves slowly, so my puts are way, way out in January and March of next freakin’ year. But here are a couple of sets of indicators with recent history:
A glance at Slope’s quarterly reports calendar shows that we’ve entered the action-packed phase of the cycle, and one of the more exciting announcements will be from Netflix (NFLX). Here are some of the cool ways that one can view Netflix as we approach this event by way of Slope’s analysis tools available to our paying members……..
From our friend at ORATS: The last two months of market and volatility action is unparalleled. Usually, when the market rises, volatility falls — since 2006, this has happened 90% of the time. The last two months, however, has seen a volatility rise connected to a market rise 25% of the time, more than double the historical average.
Historically, when volatility rises and the market rises, it has been a coin flip between the skew steepening, indicating put buying, or shallowing indicating call buying, both happening 50% of the time. However, in the past two months, volatility rising has come with a skew shallowing 73% of the time, indicating massive call buying.
Call buying is driving the volatility spikes and the real action is not in the index but in the single names, and the buying has not been in normal just out-of-the-money calls but way out-of-the-money calls.
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