Weekly Volatility Snapshot

31 May

Volatility, as measured by standard deviation, quantifies market elasticity and provides a level of probability and precision to trade within, that humbles us all.

Last week, the VIX opened above $21.00 and closed just under $19.00 for a near flat week even for all the eventful action that took place. That being once again, tariff related news with the court of international trade overriding Trump's liberation day, only to have the administration appeal, and the tariffs to be reinstated the following day.

This provided for quite a volatile move, mostly in after hours with everything closing strong to end the month.

As we look towards June starting with next week, just about all indices I track and the magnificent seven are showing near term trending volatility contracting under stated IV, as IV is melting across the board. Notable mention to NVDA MSFT IBIT and BITX for all entering the week with great IV value, now let's compare them to their respective trending bi-weekly values to observe what is being predicted to what is happening with near term trending volatility.

NVDA at a 6% IVp enters the week with an IV of 39.04% -- HV10 (31.70%) is 81% strength of current IV and resonating under monthly values. When you see a large move, that being from the earnings report last week, you will see a massive IV melt to save premium against the PA move due to the beats or misses. With that said, bi-weekly values are just off yearly lows (25.74%) as IV chases it down and i see the underlying as 94.03% coiled for a volatility swing.

MSFT at a 17% IVp enters the week with an IV of 18.99% -- HV10 (14.55%) is 77% strength of current IV and resonating deeply under monthly values. Bi-weekly yearly lows of 8.56% reflect a coiling of 90.03% at current values.

With both of these, I am looking for a volatility bounce, and regression back to quarterly means. That's where the real fun is and if played right provide excellent opportunity. For further discussion around BTCUSD within the funds IBIT and BITX look for my more dedicated posts this weekend.

For those interested in volatility analysis and the application of weighted HV ranges to IV, I encourage you to BOOST and share this post, leave a comment, or follow me to join me on this journey.

We will weekly analyze our ranges under the year-to-date VIX chart and engage in discussions as people please. So hop on board and come along for the ride!

7 Haz

İşlem elle kapatılmış

Highlight of the week, I'd say was MSFT with an outstanding move increasing it's bi-weekly volatility and shedding massive IV per move!

On to next week!