FOMC into Quadruple Witching =’s VOLATILITY …now time for the weekend!

Could there be any more volatility in this market? I mean I don’t even think the swings in the VIX are justifying how much volatility there is, and I am not just talking about in the ES. It feels like every Friday continues to be more and more epic… but this being a Quadruple Witching event =’s all the more reason to BE VOLATILE.

I traded the VIX futures (VX) ON Thursday for the first time in months — I mean it was irresistible as it set up one of the most perfect “shake and bake, fake out “V” formations” — I had no choice but to “jump” into a cheap front month VIX as it traded below 18 in the final minutes of trade (this as the ES traded to post FOMC session highs of 2011.75). As I think many identified the opportunities to “front run” settlements around the board, this VIX action into the end of Thursday’s session was right up in the list of “the best plays in town”. — From maybe around 13:50 to 15:00 we rallied almost 3.00 VOLS from a LOD to a new HOD — (taking us from 17.65 to 20.55! *Then today the VIX futures (VX) add another 5% as VOLATILITY consumed the market again, and we’re already trading 21.55… Traders must keep in mind that the VIX was trading over 30 just 2-3 weeks ago around Sept 1st.

While the market was ripping to post FOMC highs — all I could think of was “what’s going to happen next”, as always, I was thinking about the future, and I could only anticipate that the only certainty in that moment of uncertainty: “There will be VOL”.

Anyways, I closed that trade for a fast quick generous winner… and on to the next one. *Don’t get me wrong, this was not the only way to play volatility yesterday — it was just the most direct and pure way, so I did it.

Meanwhile as markets digested “FOMC” – the initial exuberance and excitement (maybe caused by the lack their of) created an enormous amount of opportunity. I was able to front run a lot of settlements as we had a lot of Futures markets “moving” after they had already had their settlements for the day. For example- Gold had settled at 12:30 somewhat around 1117 for the front month GC… but as the FOMC announcement was delivered after the metals settlement, the “rally” for Friday started early,– and we even got some more follow through to the upside during the actual US Session. I will be focused on Gold (GC) even more than usual going forward — this clearly had it’s moment to rise with the FOMC latest decisions (and the deeper implications), trading up to a HOD of 1141.5! Amongst a fairly large sea of RED, Gold was able to shine into the GREEN today… and I think this is only the start, again.

Meanwhile, there were incredibly large moves in the FX today, and what I was trading a lot of was Commodity Currencies like the AUD, NZD, and CAD — I was scalping those to the upside on their high marks from yesterdays settlement (again front-running those settles too)… all while I was dirty hedging it against my bearish day trade from yesterday as the EUR traded up to 1.1450 while other pairs got hit… There was A LOT to do… but we can’t focus on the past any longer than we already have, we are focused on the future here, so…

Time for the weekend!


Let’s try again next week. Have a GREAT weekend! – Happy Trading.

-Bret Rosenthal