Education

Prepare For Ludicrous Speed

Here is a look at the VIX and futures at the close yesterday: Now here is today’s pre market look at volatility: There was quite obviously a disconnect from reality in the after hours trade of XIV and other ETFs and or ETNs last night. The XIV fell by over 80% last night. It is […]

By Jon Najarian · February 6, 2018

Here is a look at the VIX and futures at the close yesterday:

Now here is today’s pre market look at volatility:

There was quite obviously a disconnect from reality in the after hours trade of XIV and other ETFs and or ETNs last night. The XIV fell by over 80% last night. It is down another 14% this morning, falling to $99. The fact that some poor sap(s) were getting wiped out on these volatility ETNs and ETFs in the after hours was inexplicable. The carnage was disastrous and I suspect, coordinated.

I realize that my last comment about “coordination” will rub some the wrong way, as it sounds like a rigged system. So be it. The data I was looking at, the multiple blocks representing billions of dollars of notional value that our systems spotted printing from the so-called dark pools were unlike anything I’ve seen since the “Flash Crash”.

In closing, let me say those of you that see a VIX of $46 on the above referenced graphic are likely shocked. However, that only represents a move of 2.9% in the S&P 500. Yesterday the S&P 500 finished down 4.1%, which would be a VIX of 65.6%. Gulp!