Thursday, March 1, 2007
Gotta love this volatility. I'm standing pat on my VIX calls and a variety of other put plays going out to August (Aug because I had to escape crazy nearer month volatilaties). The remaining VIX calls I have are at the expense of the house's money after the ones I sold on Tuesday had mostly quintupled and in a few rose by nearly 7 fold. In other words, I can afford to wait and see what happens in these extraordinary market conditions. Remember, this is 2007. There are a lot of newbies out there and I'm not talking on the message boards, or blogs - I'm talking newbies running money at hedge funds who aren't used to things like bear-0-ramas and corrections. This morning's spike in the VIX again is telling me that some guys and perhaps gals with lots of money - maybe too much - are in over their heads with too much leverage. There's a certain growing element of contagion that I'm going to stick around and watch with morbid amusement while hopefully further profiting. Quite frankly, this type of gyrating stuff is the thing that real black Fridays or Mondays are made of.