Ready To Pass The Baton?

October starts with a bang and a legion of misinformed retail traders assume that we’re heading straight into the next bear market. Not impossible of course given what’s going on but even IF we’re heading that way on a medium to long term basis (still doubtful) we are still going to see a bounce preceding it. Here’s why and how to take advantage:

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Is October A Bad Month For Traders?

With summer and the dreaded vacation season finally behind us I am already looking forward to the wild swings the fall and winter seasons may have in store for us. For volatility opens the door to juicy trading opportunities and that’s what we’re all about here at Red Pill Quants.

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Welcome To Red October

Equities closed September solidly in the red, as was suggested by our monthly statistics that I posted here early in the month. Of course nothing is ever chiseled in stone in the world of trading. But the odds are the odds, and until my crystal ball is back from the shop that’s what we’ll have to content with.

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Keeping It Simple

Recently I’ve talked a lot about implied volatility, mean reversion, linear regression, and other exotic topics. But there comes the time when you simply need to take a step back, clear your mind, and just look at the situation from a very straight-forward and practical perspective. So let’s channel our inner Steve Jobs (yup fan boy here – bite me) and look at some basic price charts:

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The Best Way to BTFD

Barely two weeks ago when Bitcoin was trading at $53K I got a few messages from people telling me they should have bought the dip and of course now they had a bad case of FOMO-21.

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When The Volatility Stars Align

Last week I posted a veritable PhD dissertation on the VXX (j/k) which, despite my efforts to spiff it up with my notorious teutonic humor, remained relatively unnoticed. With retail gobbling up put positions with both hands as usual, it appears the most important volatility event of the quarter once again has been largely ignored. Fortunately a handful of intrepid IV aficionados (a.k.a. option traders) managed to take full advantage of the situation.

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Volatility Strikes With A Vengeance

The VXX ranks amongst the top most hated ETFs of all time and it has retained its bottom of the barrel reputation since its introduction in 2009. It is despised for many reasons but mainly because it’s a terrible investment on a long term basis due to its factory installed value leakage. This is courtesy of the fact that it’s tied to the value of the SPVXSTR index, which in turn tracks a pair of VIX futures contracts.

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The Quick And Dirty

I’m going to give you the quick and dirty on what matters this Friday. Price always matters of course but since we’re heading into a quadruple witching after two weeks of sideways churn institutional traders are now faced with a dilemma.

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Six Red Piggies

If this market is freaking you out a little right now you are in very good company. Yes I’m talking about myself of course but my lack of modesty comes with a disclaimer: Unlike most of the muppets drawing lines on charts I have evidence to back it up whereas the retail brigade is eternally focused on the rear view mirror, a.k.a. historical price or volatility.

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