The VIX just hit its lowest level of the bear market. This week’s video explores why IV is so low and addresses the following three topics:

One: why low IV doesn’t automatically mean options are underpriced.

Two: why buying options has still been an uphill battle.

Three: My favorite strategy to buy the low volatility now.

Enjoy!

NOTES

1. why low IV doesn’t automatically mean options are underpriced.
   1. You can say the low IV means options are cheaper than usual. TRUE!
   1. But cheap doesn’t mean underpriced. Options can be cheap but STILL too expensive
   1. VIX 17%,
2. why buying options has still been an uphill battle.
   1. If you buy an option with IV of 17%/18%/19% and the stock only moves at a 9% or 10% clip. You overpaid. You didn’t get enough movement in the underlying to JUSTIFY what you paid.
3. My preferred method to buy the low volatility now.
   1. Notwithstanding the previous two points, suppose you still want to “GET LONG” volatility at these low levels. How should I do it?
      1. You think VIX is close to troughing.
      1. Typically that means the stock market is close to peaking.
   1. Bull trades on the VIX: Not a fan
   1. + Vega, delta neutral trade on SPY = long straddle/long strangle/debicon
   1. + Vega, bearish trade on SPY
      1. Aggressive: long put /bear put
      1. Conservative/higher POP: OTM put calendar
         1. ATM put calendar with OTM puts same strike. Delta 0.30 to 0.35.

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