Saturday, January 30, 2016

The Big Bang Theory: Volatility Explosion Revisited

Central Banks have conditioned gamblers to short volatility even as risk is rising...I'll go out on a limb and say it will end badly...

This is the ISE Put/Call ratio 12 week moving average:

This is the same ratio with the VIX:

This is realized volatility (red) with the VIX
Skynet and Gamblers are shorting options volatility as risk increases...something we didn't see in 2008...for a good reason. 

Oil volatility with stock market volatility
"It was a bad time to be 100% correlated to oil"