To The Moon

The market is not expected to fall this week. China announced the evacuation of Ukrainian nationals last weekend. It will take some time to consider the evacuation. I guess the geopolitical friction between Russia and Ukraine will not escalate immediately this week, so we have a one-week buffer time. There is no incentive for the dollar to continue to rise, and exchange rates do not weigh on stocks. At the same time, the market to the weekly 200 average support level rebound demand. Sentiment is strong ahead of earnings this week, so Netflix is expected to fall before rising, with an eye on Netflix's AD revenue forecast and Tesla's Q4 and Q1 sales forecast for next year.

Compared with these two companies, this week's earnings report should pay more attention to early profit warnings, such as SNAP, FB.

But today I want to share with you an idea of "insurance".

On Friday, 70,000 vix calls with a strike price of 100 were bought for a total of $4 million, following the purchase of vix options the week before:

$VIX 20230419 100.0 CALL$

There are two ways to interpret this option. The first is the most obvious one. This person believes that there will be a volatility surprise before April next year, so he ambushes the option beforehand.

The second idea looks a bit like the first one, but not quite, and that is that bear markets of this magnitude tend to have a high probability of vix hitting 80, so ambush buying VIXcall has a high probability of positive returns.

Because according to the data at the heart of the financial crisis, the highest intraday trading level of the VIX was 89.53.

So the first is suspected of some kind of insider trading, and the second is betting based on probability statistics. I think the latter is plausible, although the first is not out of the question.

The same is true for average positions in the VIX, where most people are starting to bet on extreme levels of panic. Among all VIX options with strike prices, the largest total open interest is in options with a strike price of 80, or more than 700,000 contracts, compared with 642,000 contracts betting on the VIX trading in the mid-30s, according to Cboe data.