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\nCorrelational Observations of\u00a0Indices Market Behavior.<\/h1>\n
Correlational Observations of\u00a0Indices Market Behavior.<\/h1>\nVIX Volatility futures Index.<\/div>\nBy John Thorpe, Senior Broker<\/div>\n<\/div>\n<\/div>\n\nVIX futures<\/a> expiration is a monthly occurrence. The expiration is somewhat varied, the remaining 2021 schedule is included below, typically, middle of the month on Wednesday mornings. Take a look at your daily chart for any of the indices and you see the sell offs during the week of or the week prior to VIX<\/a><\/div>\n\u00a0expiration days.<\/div>\n<\/div>\nMy belief is there would be a smaller probability of a correlational relationship during a Bear stock market, However, Since we are in the 12th year of a bull market, I believe the underling price action is created by portfolio managers rolling their hedges and adjusting their risk for the coming month. They often use the week prior to Short the VIX at higher prices (lower equity index prices) for the first week of the new VIX<\/a> contract month as they are buying back their old contract shorts pushing the VIX prices higher, thereby pushing negative sentiment into the marketplace. If there are more extreme price movements in their favor, they will elect to have the hedges expire to cash as the contracts are financially settled.<\/div>\n<\/div>\nCoincidentally, September VIX expired Wednesday morning September 15th at 8:00 a.m. CDT and the October VIX expires in 10 days.<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n![\"\"](\"https:\/\/files.constantcontact.com\/3dc00ef7001\/dc8ffd4a-8bf1-4dfe-b324-cebe8c4575c4.png\" "\\"\\"")
<\/div>\n<\/div>\n\nYou can trade both the VIX and Equity index futures with multiple leverage options, Reach out to your Cannon Trading representative for more details.<\/div>\nHere is a VIX contract description from the CBOE \u201c<\/div>\n<\/div>\nThe CBOE Volatility Index<\/a> – more commonly referred to as the “VIX Index” – is an up-to-the-minute market estimate of expected volatility that is calculated by using real-time prices of options on the S&P 500\u00ae Index listed on CBOE Exchange, Inc. (“CBOE Options”) (Symbol: SPX). Only SPX options with Friday expirations are used to calculate the VIX Index. The VIX Index is calculated between 2:15 a.m. CT and 8:15 a.m. CT and between 8:30 a.m. CT and 3:15 p.m. CT. Only SPX options with more than 23 days and less than 37 days to the Friday SPX expiration are used to calculate the VIX Index. These SPX options are then weighted to yield a constant, 30-day measure of the expected volatility of the S&P 500 Index\u201d<\/div>\n<\/div>\nThe above is the opinion of John Thorpe, Cannon’s broker since 2002. Do your homework, take a look at charts, see if you can find any correlations and understand that this is provided as trading insight\/ opinion and readers are urged to use their own due diligence.<\/em><\/div>\n<\/div>\nTrading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.\u00a0You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.<\/strong><\/div>\n<\/div>\nGood Trading<\/strong><\/h3>\nTrading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.\u00a0 You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.<\/p>\n
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Futures Trading Levels<\/strong><\/h3>\n10-20-2020<\/p>\n
![\"\"](\"https:\/\/files.constantcontact.com\/3dc00ef7001\/42af01bc-60a1-4cd8-a47f-675de37818b6.png\" "\\"\\"")
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\n<\/a>Economic Reports, source:\u00a0<\/strong><\/h3>\n
By John Thorpe, Senior Broker<\/div>\n
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VIX futures<\/a> expiration is a monthly occurrence. The expiration is somewhat varied, the remaining 2021 schedule is included below, typically, middle of the month on Wednesday mornings. Take a look at your daily chart for any of the indices and you see the sell offs during the week of or the week prior to VIX<\/a><\/div>\n
\u00a0expiration days.<\/div>\n
<\/div>\n
My belief is there would be a smaller probability of a correlational relationship during a Bear stock market, However, Since we are in the 12th year of a bull market, I believe the underling price action is created by portfolio managers rolling their hedges and adjusting their risk for the coming month. They often use the week prior to Short the VIX at higher prices (lower equity index prices) for the first week of the new VIX<\/a> contract month as they are buying back their old contract shorts pushing the VIX prices higher, thereby pushing negative sentiment into the marketplace. If there are more extreme price movements in their favor, they will elect to have the hedges expire to cash as the contracts are financially settled.<\/div>\n
<\/div>\n
Coincidentally, September VIX expired Wednesday morning September 15th at 8:00 a.m. CDT and the October VIX expires in 10 days.<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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You can trade both the VIX and Equity index futures with multiple leverage options, Reach out to your Cannon Trading representative for more details.<\/div>\n
Here is a VIX contract description from the CBOE \u201c<\/div>\n
<\/div>\n
The CBOE Volatility Index<\/a> – more commonly referred to as the “VIX Index” – is an up-to-the-minute market estimate of expected volatility that is calculated by using real-time prices of options on the S&P 500\u00ae Index listed on CBOE Exchange, Inc. (“CBOE Options”) (Symbol: SPX). Only SPX options with Friday expirations are used to calculate the VIX Index. The VIX Index is calculated between 2:15 a.m. CT and 8:15 a.m. CT and between 8:30 a.m. CT and 3:15 p.m. CT. Only SPX options with more than 23 days and less than 37 days to the Friday SPX expiration are used to calculate the VIX Index. These SPX options are then weighted to yield a constant, 30-day measure of the expected volatility of the S&P 500 Index\u201d<\/div>\n
<\/div>\n
The above is the opinion of John Thorpe, Cannon’s broker since 2002. Do your homework, take a look at charts, see if you can find any correlations and understand that this is provided as trading insight\/ opinion and readers are urged to use their own due diligence.<\/em><\/div>\n
<\/div>\n
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.\u00a0You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.<\/strong><\/div>\n<\/div>\nGood Trading<\/strong><\/h3>\n
Good Trading<\/strong><\/h3>\nTrading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.\u00a0 You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.<\/p>\n
<\/p>\n
Futures Trading Levels<\/strong><\/h3>\n10-20-2020<\/p>\n
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<\/p>\n
\n<\/a>Economic Reports, source:\u00a0<\/strong><\/h3>\n
10-20-2020<\/p>\n
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![\"\"](\"https:\/\/files.constantcontact.com\/3dc00ef7001\/833cba6a-2b06-466d-8c46-790c6d7c2c76.png\" "\\"\\"")
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