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Monday, January 31, 2011

Stay Long SPY Volatility

- Mean implied volatility on SPY options increased to 16.83 from 14.6 on Jan 20th when I recommended to buy volatility. FVE indicator's value rose from 13 to 14.8 during the same time. Although implied volatility is above the FVE indicator's value, the FVE indicator remains above its moving average so I would not yet take profits on long options, long volatility positions.
- All my indicators are pointing to higher probability of SPY correction than they were a week ago, although SPY price trend is still bullish. I feel comfortable in my current options position.

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