On the shopping list: October vol
My base case for the next few weeks is boring. Markets drift up into mid-August. The low-vol regime just carries on.
That means I'm not rushing to own volatility here. There's no need to pay for it yet.
But I'm already pencilling in the other side.
Vol tends to run cyclically higher later in the year, into the autumn. This year there's the added pull of the midterms sitting out on the calendar. That's the kind of window where the calm tends to break, or at least gets a lot more expensive to insure against.
So the plan I've got sitting on the shopping list is to start buying Oct/Nov vol.
Probably through VIX call spreads. Maybe call flies. The specific structure depends on how the pricing looks when I actually get there and see the surface.
The common thread is defined-risk. Structures that give me upside to a vol spike without bleeding me too hard while I wait for the season to actually turn.
The point is the timing.
Buying protection when everyone's nervous is expensive. Buying it while summer is still sleepy, ahead of the season that historically wakes vol up, tends to be the better trade.
Not yet. But on the radar.
Want to know more about my processes? The framework I built across 20 years on bank options desks is below.
The bigger point beyond this specific trade.
Every year has a rhythm the calendar forces on the market. Earnings cycles. FOMC dates. Options expiries. Election years. Autumn drift. The rhythm doesn't tell you exactly what will happen, but it tells you when the calm is more likely to break and when it's more likely to persist.
Reading that rhythm lets you buy insurance before the price of insurance moves. It lets you sit on your hands during the sleepy stretches without missing the setups. It lets you build a book where the calendar becomes one of your active inputs.
If you want to skip the masterclass and jump straight into our course, the Options Insight Advantage, this is the link.
Imran
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