The stock market has been very stable over the past few
months. The VIX (volatility index) is at
a low right now. Today it was down 11%
after the jobs number was in line creating a higher probability that interest
rates will stay the same for a bit longer, possibly putting a hold on Fed rate
hikes.
We are in uncharted waters so it is hard to predict what
will happen next. There is no history to
peg this situation on but my educated opinion is we will see some major
volatility in the near future. September
and October are historically some of the most volatile months for stocks. And this
volatility could be to the downside. I
hope your financial advisor has warned of you of this situation….
If you have been selling credit spreads in options you might
want to start adjusting your strategy.
With lower option prices it might be time to start buying calls and puts
(spreads, calendars, leaps, straddles, even straight up. That is all.
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