This Week in VIX – 7/25/2014

VIX rose over 5% last week despite the S&P 500 being basically flat on the week. There could be some of that anticipation we see in VIX (as opposed to reacting to the market) in front of big economic events and this coming week is full of those events. The FOMC rate announcement comes out Wednesday and Friday before the equity market opens we will get the first read on the economy in July when the Labor Department releases the monthly jobs report.

VIX PA

The VIX curve isn’t terribly steep with the August contract only at a 0.81 premium as of Friday’s close. I would have expected a bit more based on the potential for a spike in VIX this coming week.

VIX

Based on this coming week I took a peak at Friday’s VIX option activity. The first thing I noticed was it was sort of quiet, but the other thing that stood out a bit were two trades that occurred after lunch. Someone bought 4,000 of the VIX Aug 20 Calls at 0.24 and then a little later there was a buyer of over 7,500 of the VIX Aug 23 Calls for 0.15.