Prefer to view this content on our website? Click here.
Dear Fellow Investor,
Three Easy Ways to Trade a Temporarily Complacent VIX
Just a few days ago, the Volatility Index (VIX)—often referred to as Wall Street’s “fear gauge”—spiked to a high of 60.13 amid escalating trade war concerns. The move caught the attention of traders and institutions alike, as such levels typically signal widespread market anxiety and uncertainty.
But just as quickly, that fear seemed to dissipate. With the announcement of a 90-day cooling-off period in trade tensions between the United States and China, the VIX tumbled to 18.6, marking a dramatic shift in sentiment. Investors, for the moment, breathed a collective sigh of relief.
But let’s be clear—this relief is temporary.
Volatility doesn’t disappear. It gets deferred.
Monument Traders Alliance
Former Wall Street Insider Calls This His Biggest Gold Play Yet
Karim Rahemtulla, the trader behind a 400% gain in 24-months on Rolls-Royce, has uncovered another potential multi-bagger. This under-$20 stock gives you exposure to over 1 oz of gold with the lowest production costs in the industry. And an upcoming announcement could send this stock soaring.
Get Karim's urgent briefing — click here now.
Why the Calm Might Be Short-Lived
What happens after the 90-day grace period between the U.S. and China? That’s the trillion-dollar question. For now, there are simply no guarantees that tensions won’t flare up again—and history shows us that they often do. If the negotiations stall or reverse, the VIX could erupt again, and traders will be watching closely.
Retailers like Walmart are already waving red flags.
Walmart CEO Doug McMillon said, “We will do our best to keep our prices as low as possible, but given the magnitude of the tariffs—even at the reduced levels announced this week—we aren’t able to absorb all the pressure given the reality of narrow retail margins.”
That’s a blunt warning: rising costs may get passed down to the consumer.
This matters because consumer spending is the backbone of the U.S. economy, accounting for roughly 70% of GDP. When consumers cut back, everything from retail sales to corporate earnings takes a hit. And we're starting to see that happen. Many Americans are already tightening their belts as inflation remains elevated and uncertainty clouds future outlooks.
In this environment, any hint of sour economic data—or another breakdown in trade talks—could send markets spiraling and volatility surging once more.
Retailers Are the Canary in the Coal Mine
Walmart’s warning won’t be the last. As earnings season progresses, other major retailers like Costco, Target, and Best Buy will report their financials. These companies not only reflect consumer sentiment but also provide forward-looking guidance on how tariffs and inflation are affecting their business models.
Any sign of weakness in their reports or guidance could spook investors. That could spark a chain reaction that pushes the VIX higher again—especially if investors believe the 90-day trade truce will end without a sustainable agreement.
In other words, we may be in the eye of the storm, not out of it.
So how can investors take advantage of a potentially complacent VIX before it spikes again?
Let’s explore three of the most straightforward and accessible trades.
T3Live
How to win with just 1–3 trades a day
Forget watching 15 charts at once or flipping between tickers every 3 minutes
David Prince—a 30+ year trader—just dropped a free trading guide that reveals how to win with just 1 to 3 setups a day.
In this wild market, it’s key to know what setups to look for… as you don’t need to day trade to make your day… or even your month.
No, every trade isn’t a winner… especially with options. But he’ll show you how to manage the RIGHT positions.
This free download gives you the strategy, 20 tips, and trade examples that made traders’ months.
Get the free book now →
Three Simple Trades to Ride a Spike in Volatility
ETF: ProShares Ultra VIX Short-Term Futures ETF (SYM: UVXY)
The UVXY is one of the most aggressive ways to trade a spike in volatility. It aims to return 2x the daily performance of the S&P 500 VIX Short-Term Futures Index. This makes it a powerful tool during short-term surges in the VIX—but be warned: it’s not meant for long-term holding. The leverage makes it vulnerable to decay over time, especially during periods of low volatility.
Best for: Active traders looking for amplified exposure during high-volatility events.
ETF: iPath S&P 500 VIX Short-Term Futures ETN (SYM: VXX)
The VXX offers straightforward exposure to short-term VIX futures contracts. It’s less volatile than UVXY but still moves significantly when volatility rises. It doesn’t use leverage, which can make it more suitable for traders who want exposure without the extreme swings.
Best for: Traders who want volatility exposure without leverage or extreme short-term risk.
ETF: ProShares VIX Short-Term Futures ETF (SYM: VIXY)
Like the VXX, VIXY provides direct exposure to a portfolio of monthly VIX futures with a weighted average of one month to expiration. It closely mirrors the performance of the VIX without the leverage of UVXY, and it's an ideal option for traders expecting a moderate increase in volatility.
Best for: Investors seeking pure-play VIX exposure with less risk than leveraged alternatives.
Stansberry Research
MUST SEE: Elon Musk's latest project
He's one of the most controversial men on the planet. But the Tesla founder's latest project could be his boldest yet, potentially making Tesla worth $25 trillion. It's part of what the Financial Times is calling "an imminent revolution" - an event coming as soon as May 31.
Get the four steps to take this month to put yourself on the winning side of this $16 trillion wealth transfer.
Are you expecting more volatility in the market soon? If so, what are you doing to prepare? Hit "reply" to this email and let us know your thoughts!
Tidak ada komentar:
Posting Komentar