March 17, 2025 | Daily JAM, Short Term, Volatility |
Today’s Hot Money Moves NOW: Buy VIX Volatility Call Options. Toward the end of January, I bought VIX Call Options, hoping to make money as volatility increased in the market. I bought a VIX call with a strike of 20, and a VIX call with a strike of 26–both with May 21, 2025 expirations. Both of these buys were up about 40% before Friday’s snap-back rally. And looking at probable “events” I think volatility is going to increase in the second half of March. But this week we may see some optimism bring the VIX down and you may be able to buy more options on that future volatility at a temporarily depressed price. I would look to buy these options this week and hold for the next three weeks or so, through more tariff uncertainty in April and sell before the May 21 expiration. For more detail om my VIX options buys see the Volatility Portfolio on my subscription JubakAM.com site.
March 16, 2025 | Daily JAM, Short Term, Volatility |
Friday’s snap-back rally took a big bite out of the CBOE S&P 500 Volatility Index (VIX). The VIX dropped 11.72%, or 2.89, to 21.77. But the plunge in Call options on the VIX was even bigger with the VIX Call option with a strike price of 20 and an expiration of May 2025 falling 23.34% and the VIX Call option with a strike price of 26 and an expiration of May 2025 26.000 falling 31.34%. (I’m citing the action on these two options because they are the Calls that I own in my Volatility Portfolio.)
This is exactly the opportunity I flagged last week to add more volatility bets without paying too much after the run upon options prices that came to a screeching halt on Friday.
March 13, 2025 | Daily JAM, Short Term |
The Standard & Poor’s 500 fell 1.4% today. That took the index into correction country with a three-week rout from its high on February 219 of more than 10%–the technical definition of a correction. The tech-heavy Nasdaq 100 Index already in a correction lost 1.9% on the day. The Dow Jones Industrial Average fell 1.3%, bringing it 9.3% below its last record in December–and to the edge of a correction.
The 16 trading sessions it took for the S&P 500 to tumble by this magnitude from its February 19 high marks the seventh-fastest correction in records going back to 1929, according to Bloomberg. Three of the seven-fastest drawdowns of this magnitude happened under President Donald Trump–in 2018, 2020 and now.
Some technical indicators are saying that the drop has been too far, too fast. And that we could be about to see a short-term snap-back rally.
March 1, 2025 | Daily JAM |
I see the beginning of two weeks of extraordinary volatility. Look what’s on deck.
January 29, 2025 | Daily JAM, Volatility |
When AI stocks plunged on Monday on the news out of China’s AI startup, DeepSeek, and fears that this meant the end of the AI ‘bubble,” shares of AI stocks such as Nvidia (NVDA) and Broadcom (AVGO) plunged 17% and the NASDAQ Composite tumbled. But the market as a whole was remarkably unperturbed. The CBOE S&P 500 Volatility Index (VIX), the “fear index” did climb by 20%.
TO ALMOST 18. 18? The 10-year average for the VIX is 18.26! So with the prospect of a collapse in the AI bubble–which I don’t see despite clear extremes of valuation in the sector–the AI trend is real and revolutionary. With the possibility that the Federal Reserve will dash hopes for interest rate cuts in 2025. With the possibility that a renewal of the 2017 Trump tax cuts and new tariffs will revive inflation. With the possibility that the ungovernable extremes of the Republican party will be unable to govern and will really shut down the government in a huge debt ceiling/budget fight. With all of that danger lurking out there, the VIX traded at just 18 on Monday and closed at 16.56 today, January 29? In my opinion this hedge on risk is on sale.
January 27, 2025 | Daily JAM |
Don’t think traders and Wall Street market strategists haven’t noticed: on a day when AI stocks like Nvidia (NVDA) and Broadcom (AVGO) fell 17% each, the Dow Jones Industrial Average added 0.4%. Yes, Wall Street’s “fear gauge”—-the VIX—soared 20% the most since mid-December–but it closed the day just below 18. That’s near the index’s historical rage of normal. When the markets really afraid the VIX spikes into the 30s or even into the 40s. On a day when AI tech stocks crumbled, the market as a whole didn’t seem especially fearful.
November 3, 2024 | Daily JAM, Morning Briefing |
In normal times, the November 7 meeting of the Federal Reserve’s interest-rate setting body, the Open Market Committee would be the big event of the week. But these aren’t normal times in case you haven’t noticed. The country faces a stark choice on Tuesday and the polls show essentially a dead heat. And then add in fears that Donald Trump and/or his followers won’t accept the election results if he loses. Traders and portfolio managers have been adding hedges to protect against market volatility in the days around the election.
August 16, 2024 | Daily JAM, Morning Briefing, Short Term |
What happened to all that selling? And the conviction that the U.S. economy ws headed for a recession? The Standard & Poor’s 500 finished Thursday, August 15, with another up day for a 6-day rally that has pushed the index up 6.6%.Treasury yields surged with the yield on the 2-year Treasury, the maturity most sensitive to shifts in sentiment about the direction of Federal Reserve interest rate policy, climbing back above 4%. The S&P 500 climbed 1.6% on the day. The Nasdaq 100 added 2.5%. The small-cap Russell 2000 gained2.5%. The CBOE Volatility Index, Wall Street’s “fear gauge,”the VIX, dropped back to near 15, below its long-term average, and hugely below its August 5 close at 38.57. The proximate cause of the rebound rally? Three reports showing that the U.S.consumer is alive, well, and still buying stuff.
February 12, 2024 | Daily JAM, Mid Term |
When I wrote my post “Was the Meta Platform 20% pop the market top? An important sign, yes,, but not for the reasons you think” I wasn’t thinking of a three-part series. But then came Part 2 “Why his isn’t 2000–I don’t see a replay of the Dot-Com Bear Market.”
And now Part 3: “OK, It’s not 2000, but that doesn’t mean there’s no risk in the market.” Part 3 in this series is going to segue right into the new Special Report that I’ll post on Wednesday with seven concrete steps I think you should implement now to protect your portfolio. But for today, I’m going to focus on a framework for thinking thinking about reward and risk in the current market. Think of the topic as “Why your portfolio needs protection now–even if we aren’t looking at a Bear Market.”
December 4, 2023 | Daily JAM, Morning Briefing |
I’m hearing some chatter that says bond traders and analysts are stepping aside from the bond rally. Or are planning to do so. Their argument is that the move has been too far, too fast. Specifically, I’ve heard talk of selling if the yield on the 10-year Treasury hits 4.00%. On Friday, the yield was 4.20%. So I’d be watching to see if anything like a bond rally pause or reversal materializes during the days ahead of the Federal Reserve meeting on December 13
November 10, 2023 | Daily JAM, Mid Term, Morning Briefing |
My bets on rising volatility have been hammered in the last few days. The December 20 Call Options on the CBOE S&P 500 Volatility Index (VIX) at $280 a contact dropped another 21% today to $121 a contract. The January 17 Call Options at 17 that I bought for $268 closed at $211, down another 16%.The VIX itself ended the day at 14.23, down 7% for the session. It’s sure hard looking at losses like this. But I would remind you that the VIX is very volatile. The volatility index was at 21.71 on October 20. And that the calendar is marked with two big events that could reunite financial market volatility, one courtesy of the House of Representatives and the other courtesy of the Federal Reserve.
October 27, 2023 | AMZN, Daily JAM, INTC, Short Term, Top 50 Stocks, VIX, Volatility |
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