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Epic VIX Short Hits New Record, But Is There Trouble Ahead?
Ok, well it's time for another edition of "interpret that record short VIX positioning."
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Love your stuff, Walt. It amazes me that in spite of historic seasonality clearly high in late August-October, shorts have piled on even more. I also looked at the CBOE SKEW index, which hit 142 a couple days ago. I went into some detail on SA:
https://seekingalpha.com/article/4093776-different-look-volatility-look-skew
Buying VIX (VXX) calls is a one way ticket to Palookaville, unless you time it just right. It seems to me that VXX has a bias to go down in price, even if VIX stays constant.
What’s the solution?
Well H like so many completely fu*ked up things that are upside down when they should be right side up and vice/versa eventually the broken clock effect come into play.