Trade Exit, $KEW!!!!

The SPX trade did not exactly go as planned, when the market took off this morning I had a bad feeling that this might be a major rally, I ended up exiting the trade at 75.50, for a gain of 5.50. Still I will take that over a hole in the head. By day’s end the spread was back to being worth about 80.50. There are worse things than closing shop with a 5+ dollar gain.

I think the rally was a little much, and apparently so did some major houses. Strike IV was in today across the board, except on the way downside, puts that were 15% out of the money or more saw their IV’s fall, but not at the same rate as ATM vol. My guess is traders do not want to give away this down side, because they are not fully buying today’s rally. If we are flat or rally again tomorrow, I think even the downside skew will flatten.

Yesterday's SPX Skew

Lower ATM, relatively higher OTM

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