A sample text widget

Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.

In a day of stock market turmoil, a bet on calmer waters ahead

The VIX spiked up to 31 at one point today:

as the stock markets gave upĀ the remainderĀ of their calendar year 2011 gains:

I used this period of turmoil — much of it seemingly rooted in Japan’s nuclear problems following Friday’s earthquake — as the time to switch course yet again, and bet on calmer times ahead, and a drop in the VIX with a put spread.

Specifically, I bought 10 VIX April 25 puts for $3.20 each, and sold 10 VIX April 22.50 puts for $1.65 each. My total cost was $1550, and this bet will pay off best when and if the VIX drops to 22 1/2 before mid-April.

At the time I put the spread on, VIX was 28.62.

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>