CHART OF THE DAY: Learn To Measure & Map With Premiums

09/17/21 08:03AM EDT

 Below is a chart and brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough. 

Another way to measure and map the ROCs (rates of change) of consensus market sentiment is through the lens of front-month options PREMIUMS and DISCOUNTS:

A) SP500’s implied volatility went out at a +64% PREMIUM to 30-day realized volatility yesterday
B) NASDAQ’s (QQQ) implied volatility went out at +59% PREMIUM to 30-day realized volatility yesterday
C) Consumer Discretionary’s (XLY) implied volatility went out at +53% PREMIUM to 30-day realized vol yesterday

“But, but, KM… all of these numbers… what do they mean?”

The most important thing is that I know what they mean. The Question you should ask yourself is why do you waste your time reading people’s rants about what the market could or should do when they don’t write in ROC numbers?

CHART OF THE DAY: Learn To Measure & Map With Premiums - 9 17 2021 7 52 42 AM

© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.