Indications Of A Potential Down Move?

In a volatile market, indices like NASDAQ, Dow, and Russell see slight gains amid a drop in volatility, even as tech giants like Apple and Microsoft decline, and crude oil holds steady. Meanwhile, a CBOE discussion suggests that despite a high skew indicating increased protection buying, outlier market moves might surprise when skew is lower, challenging conventional market predictions.

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[CherryBlossom-dl]

Markets may seem calm, but when protection costs dip, that's when the real surprises strike. Could lower skew signal the perfect entry point for smart traders to capitalize on volatility? Timing is everything in this game. Who’s ready to seize the next wave?

[djayjp]

Should've included a chart plotting Skew over the entire study period.

[antoniomoreno]

Thanks guys for this study! The reason for this high skew is the pre war scene in middle east. If in some time, lots of puts expire worthless while the war scene still goes on, maybe the second move for a lot of long stock holders could be to sell, some or part of these stocks instead of paying the high cost of the new long puts.... then the "Down move", in my opinion.

[FigureTrader-com]

That makes you wonder if the outlier moves happen due to deal option hedging, which would be a reaction to the big players buying protection, or for the original reason that sparked the need for protection. Sounds like it could simply be a self-fulfilling prophesy at least some percentage of the time.

[go]

The market moves based on positioning and crowding. Lots of stuff could cause panic but if everyone is already betting that way the “bad news” won’t move the market. It’s when few were expecting something and positioned that you get a big move.

[MustadMarine]

I don't understand. SKEW daily numbers tend to range around the same data points as if normal.

[KilgoreTroutAsf]

If the skew is high it means the market is preparing for a big downturn, so the actions taken to prepare for it might actually soften the blow significantly.
Be fearful when others are greedy and greedy when others are fearful.

[sergebrosseau]

Market maker Play a game with traders. There so much gap those days and they play with volatility to make sure some traders lose there account.

[RashelYeva]

!!!I recently sold some of my long-term position and currently sitting on about 250k, do you think Nvidia is a good buy right now or I have I missed out on a crucial buy period, any good stock recommendation on great performing stocks or Crypto will be appreciated

[mrpickle]

markets are not allowed any down weeks or down months.. CONGRATS to everyone who plays the ZERO risk free money just buy the SPY dip system $$$ I love 100% up room to go crushing the permabears$$

[BenjaminBatista-xzfl]

From $37K to $45K that's the minimum range of profit return every week I thinks it's not a bad one for me, now I have enough to pay bills and take care of my family.

[mrpickle]

stocks proving that the bond market is wrong wrong wrong