VIX Didn’t Drop During Santa’s Run
Things that make you go hmmm (it’s a lyric from an old song, fyi).
VIX is a measure of the implied volatility in S&P options markets. You don’t need to know how to calculate it, the graph is entirely the same as every other financial topic that I write about, literally it is the singular framework.
This picture has been seen on this Substack and videos, as many times as I can mention. You do NOT need to know the math here, you need to see the fact that the letter ‘v’ exists, and it changes the value of an option. Higher uncertainty, higher prices: that is the relationship that you can assign to your personal situation as you consider any financial choice you face. If you are Jabba the Hutt, the ACA-regulated, competitive price of health insurance is a price that is too low, i.e. Jabba buys with both hands, especially if he gets access to the APTC.
Anyways, back to the show:
It may “look” like the blue line is a lot lower during the past 3 months. Actually, my opinion is that this has stayed stubbornly high, when compared to Santa’s clear run to the all-time highs.
Takeaway: not everyone is fully convinced here, even when you take into account that seasonality is very powerful, and the professional market knows this.