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Guest Post: The VIX Article No One Will Like
Via Kevin Muir of “The Macro Tourist” fame
I am pretty sure no one will like today’s post.
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Agree with all above except would argue vix capitulation has occurred over the past few weeks. Absolute low may not be as important as duration of low. On many measures the duration of low has blown through prior instances of low volatility. Would make an interesting article
Of course all the info, numbers, etc are not manipulated in any fashion by all the players in this game you are trying to convince us is fair and honest?. What I do know is that, YOU don’t know.
“But VXX is not a regular stock. It is an ETF. And ETFs can be created and redeemed by market makers.”
Exactly!! This was a very important sentence.
The whole supply demand relationship with stocks does not translate to the VIX. VIX is all about futures and options contracts on major indices.
VIX options care about supply and demand and momentum, similar to options on stock.
The VIX itself, does not. It does not care if people are buying or selling the VIX. It cares about where contacts (options) think that SPX will be at some future date.