Market Update And Friday Q&A

Market & Position Update Hello Smart Option Sellers! Well, we made it through another week (almost!). The markets had started out strong but have been kind of fading as we move towards the weekend. We are practically at the same level now as we were on Monday. Volatility has faded as well, which can be seen in this chart of the VIX. As a refresher, the VIX is a measurement of how erratic (or not erratic) the market is predicted to be in the near future, which is calculated by using the options contracts on the S&P 500. The VIX is also used a a "fear" gauge, as it measures how panicky investors can get. When markets sell off, the VIX jumps, and when markets are calm and rises, the VIX goes down. The VIX also indicates the "expensiveness" or "cheapness" of options prices. When the VIX risies, option prices tend to rise, and vice versa. For option sellers like us, we like when volatility rises, as it gives us more money when we sell options contracts. But at the same time, an exploding rise in volatility can be quite scary, as it indicates the market is selling off violently. This can be nerve-wracking for even the most experienced traders, including myself. We all think the world is coming to an end and we could be forced into making bad trading decisions. This usually leads to puking your positions are the wrong times. So yes, we like rising volatility, but the violent rises I can do without. Anyway, volatility is coming down, which helps with our current put-sell plays (and our VXX call spread). As of now, all of our positions except for two are doing well - meaning they are get