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Showing posts with label VIX index. Show all posts
Showing posts with label VIX index. Show all posts

Wednesday, 14 February 2018

50 Cent earned $200 million from his stake on VIX

Do you remember the trader "50 Cent"? No, it's not the rapper, it's the trader with this nickname and known for his constant call-options on the VIX volatility index. In the past year, these stakes had a constant loss, due to the record low volatility.
However, it turns out that patience is rewarding, and after the recent outburst of volatility, the trader is already ahead with $200 million!
In fact, among the biggest winners of last week's fall in US indices was the trader named on the famous rapper. He has earned about $200 million in total from his stake on the volatility index, thanks to his $400 million instilling of his investment, and it's only for a month.
At one point, 50 Cent turned into 30 Cent because of the depreciation of his traditionally traded options. In early February, however, the time for retribution for the trader came when he was rewarded for his patience, commented market observers.
It is unclear, however, whether the price of this profit was "not quite salty." Because, according to many market observers, it is possible that the stake in call-options on the volatility index was a pure sample of hedge or high volatility insurance. But such may have done much more damage than the $200 million profit, the same experts said.


Wednesday, 26 July 2017

New 23 year old bottom for VIX

US indices rose to new historical records and the volatility index fell to a new 23-year low.
The broadly-watched indicator reached the lowest value of 9.04 points, or a level not seen since December 1993.
The low VIX ratio is traditionally associated with bullish attitudes to the stock.
The average level of the index in the long run is about 20. Since the beginning of the year, however, the strong rise in US stocks and new records of indices sent the "fear" index to historical minimum.
On Monday, the index closed below 10 points for the eighth consecutive day, marking its longest-ever similar series.
Good economic performance, outstanding quarterly reports and the lack of more significant risk factors for the foreseeable future, are the main reasons for the low level of the indicator.
The sense of "security" is not limited to the stock markets alone. The one-month volatility of US government bonds is at 46.9963, or again the lowest in history.
Increasingly, investors are trying to take advantage of the low levels of the volatility index. There are massive purchases of call options on the VIX, or bets to increase the volatility of the index in the coming months.
The common theme for investors is to increase volatility after the summer.



Thursday, 8 June 2017

Gold continues to rise steadily

Gold futures continued to grow as investors kept their strong demand for rescue assets.
Metal futures with delivery in August added $12.1, or 0.9% to a level of $1,294.80 per ounce. This was the highest metal price since April 18th.
Why Investors Buy Gold?
Purchases take place shortly before the early parliamentary elections in the UK on 8 June.
In addition, the former FBI head is in the process of hearing, which could seriously raise investor concerns about Donald Trump's controversial actions.
We can not fail to mention the forthcoming ECB interest rate meeting as well as the increased tensions in the Middle East with regard to the allegations of Qatar that it supports terrorist organizations.
Interestingly, the rise in rescue assets comes at a time when the fear index continues to trade at levels close to the lowest for the past 30 years.
Or investors who believe that gold may continue to rise as a result of increasing uncertainty can safely look at the VIX index.