Friday, June 12, 2015

Risk is Binary: Skynet Is Not The Bagholder of Last Resort

ZH: June 12, 2015
"Once you funnel everyone into risk assets and then mask the risk to generate complacency, you guarantee a bidless market when risk reappears. For six long years, the Fed has acted on the dubious faith that signaling participants that risk has vanished is the equivalent of actually eliminating risk. In other words, by ruthlessly suppressing VXX (a popular trading measure of short-term volatility), the Fed and its cronies have generated the illusion that risk has been vanquished."

Bloomberg June 12, 2015

"While the turmoil that rocked bond and currency markets in past weeks has been mostly absent from equities, it won’t be forever, options traders speculate. They’re building hedges against equity swings to levels not seen in eight months, according to contracts tied to the benchmark gauge for U.S. stock volatility. Judging by the most popular options, many of them are bracing for disturbances in the next six days."

Betting on a spike in "Volatility" aka. brick shitting fear
Vix Options Call / Put Ratio 
25 day moving average:

Goldman Sachs always knows something. Don't they?