Business Magazine

Volatility Sellers Step In As SPX Slips

Posted on the 17 April 2015 by Phil's Stock World @philstockworld

Implied volatility on the S&P 500 Index (Ticker: SPX) popped Friday morning amid a more than 1.0% decline in the index to the lowest level since April 9. The roughly 12% move higher in the reading of IV on SPX is perhaps the motivation for sellers of iron condors in the April 24 expiry options contracts. The trades were of different sizes and at different striking prices. One of the trades was constructed through the sale of the Apr 24 ’15 1875/1975 put spread against the sale of the Apr 24 ’15 2140/2210 call spread at a net premium of $0.55 per contract. The 1,500-lot trade makes maximum potential gains of approximately $82,500 as long as the SPX trades above 1975 and below 2140 at expiration next week. The smaller of the two condors yields a net credit of $0.50 per contract and involved the sale of the 1885/1985 put spread against the sale of the 2150/2210 call spread. The seller of the 500-lot iron condor stands ready to bank maximum possible profits of around $25,000 in the event that the index trades above 1985 and below 2150 at expiration. The chart below displays a one-week chart of the VIX, which rallied roughly 14% this morning to 14.44.

Chart – One-week performance of the VIX

Volatility Sellers Step In As SPX Slips


This article will become free after 48 hours (see below for free content). To read the rest of this article now, along with Phil's live intra-day comments, live trading ideas, Phil's market calls, additional member comments, and other members-only features - Subscribe to Phil's Stock World by clicking here.

Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!

You Might Also Like :

Back to Featured Articles on Logo Paperblog

These articles might interest you :

  • The European Union Just Made Bioenergy Worse for Biodiversity

    European Union Just Made Bioenergy Worse Biodiversity

    While some complain that the European Union (EU) is an enormous, cumbersome beast (just ask the self-harming Brexiteers), it generally has some rather laudable... Read more

    The 20 August 2018 by   Bradshaw
    ENVIRONMENT
  • The Romantics

    Romantics

    These two words conjure an image in my mind of running through fields with flowers in my hand and my beloved running after me, very much like the Bollywood film... Read more

    The 20 August 2018 by   Ashleylister
    BOOKS, CREATIVITY, CULTURE, SELF EXPRESSION
  • Lesson 1570- Life Lessons I Want My Kids to Know

    Lesson 1570- Life Lessons Want Kids Know

    We just back from a family vacation on Cape Cod. It’s the one week of the year that we all go barefoot, drink cold beers in the afternoon, read books in the... Read more

    The 20 August 2018 by   Wendythomas
    ANIMALS & WILDLIFE, HOME, PETS, SELF EXPRESSION
  • Who’s Gonna Love You, Tebey at Boots & Hearts 2018 Interview

    Who’s Gonna Love You, Tebey Boots Hearts 2018 Interview

    Tebey teased his last-minute addition to Boots Hearts 2018 through his social media channels, and then he came on out to the Burl's Creek Event Grounds and wa... Read more

    The 20 August 2018 by   Phjoshua
    LIFESTYLE, SELF EXPRESSION
  • Frugal Tip: Make-Your-Own Sore Throat Syrup

    Frugal Tip: Make-Your-Own Sore Throat Syrup

    Summer is almost over, and there is a chill in the air, so it's not hard to think of the cold season coming soon. And with it - coughs, colds and sore throats. Read more

    The 20 August 2018 by   Catherine Mcdiarmid-Watt
    FAMILY, FINANCE, SHOPPING
  • 7 Physical Signs Your Partner Is Sleeping With Someone Else

    Let us put aside the idea of a perfect world where people love their lovers honestly, with all their heart and would never ever cheat on them, where all... Read more

    The 20 August 2018 by   Naijapary
    SOCIETY, A-CLASSER
  • Home Decor: A Garden for Every Space

    Home Decor: Garden Every Space

    For in the true nature of things, if we rightly consider, every green tree is far more glorious than if it were made of gold and silver. Read more

    The 20 August 2018 by   Rashmi Gopal Rao
    DESTINATIONS, TRAVEL

Magazines