If You’re Short Volatility, Do Yourself A Favor And Go Buy A New iPhone

Here’s one that’s sure to bring in some angry e-mail from both the Apple acolytes and the vol. sellers.

It could very well be that if Apple’s latest iPhone rollout continues to disappoint, the subsequent pressure on the stock price imperils the low vol. regime.

Does that sound crazy to you? It shouldn’t. In fact, it’s almost tautological. 


“When the P/E of the biggest company in the index declines, that usually means that the stock price declines, putting downward pressure on the index and upward pressure on vol.,” Bloomberg’s Cameron Crise writes on Monday.

Have a look at a chart of the rolling correlation between Apple’s P/E and the VIX:


So if you’re short vol., maybe take some of your ‘vol’uminous profits and go buy an iPhone. Or better yet, buy five or six. 

Just think of it as an investment in your future.


3 thoughts on “If You’re Short Volatility, Do Yourself A Favor And Go Buy A New iPhone

  1. From CNBC/Seeking Alpha:

    While RBC said that only 64 percent of prospective iPhone buyers want an iPhone X, 8 Plus or 8 versus the 71 percent who wanted an iPhone 7 and 7 Plus last year, they are still positive on Apple overall and raised its price target thanks to the iPhone X’s steeper price tag.

  2. that was a good one Mr. H.
    now the 5 trillion dollar question is how far the market will go down and how far the USD and bonds go UP. they both look to be breaking out–i will wait another few days to see it it holds.
    hedge’s sell on the BTFD buyers–that will feel good.
    i am thinking a 2 to 4 sig event–ratcheting on the way down.
    hmmmmm–time to put on the thinking cap.

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