With options on the volatility index (^VIX) having expired on Wednesday and the rest of the options world of equities and ETFs expiring today, we caught up with Jon Najarian, co-founder of TradeMonster.com for a check on how the smarter options traders are positioning themselves for the rest of the year.
Why do you care? For one reason, on July 28th of this year Najarian told Breakout options traders were positioning for a huge leg down in stocks. The S&P500 was at 1,300 at the time.
After a crazy 4-month ride, Najarian tells us November options on the volatility index itself "went out with a whimper" on Wednesday. Despite Thursday's spike, Najarian still thinks VOL will "hang in with a VIX somewhere between 28 and 32," with some wiggle room on either side. For the record, the VIX closed at 29.44 yesterday, double the mid-teens norm we saw in early of 2011, but a far cry from near 45 where it peaked near the October stock lows.
Those inclined to trade volatility itself into the rest of the year better hurry as far as Najarian is concerned. If you're going to "bet on a higher VIX do it between November expiration and the end of the month," he says. "December is a snoozer."Read More »from Options Action Suggests “December Is a Snoozer” Says Jon Najarian