The markets made a small recovery today after a sizable sell-off yesterday. Not only did all three majors close significantly lower on Wednesday, but the move was also accompanied by a 46% spike in the VIX.
The complacency of these markets has been going on a long while – pretty much since December of last year. Volatility seemed to all but disappear over the last couple of weeks as the VIX dropped to historical lows in late-April. Just like an overextension in any chart, we were bound to see some sort of correction or bounce.
May's monthly options expire tomorrow. With the heightened volatility out there, it could take a little longer to get orders filled, especially with another downturn in the markets. If possible, start early and be patient with any limit orders. Be mindful of the intrinsic value your position carries and use that to gauge a fair price for your limit order.
See you on this Sunday's live Trading Room class!
Have a great night,
Your Maverick Trading Team
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