Let There Be Vol...

 For the first time in a couple of weeks we are starting to see a bit of a reversal in the RVX (the index that tracks the implied volatility of the RUT).  You can see by the long tail on the top of today's bar that at one point it was really up.  For a while there was a great deal of fear in the options market driving prices up.  The question for me is whether IV will find a new range, somewhere inside the yellow rectangle.

The recent drop has been great for the condors, not so good for the calendars, but good for the market overall.  Meanwhile our Calendar is doing fine.  Today's jump in IV, as reported in earlier posts, is great for the calendar.  You can see the white line has now reached comfortably into the profit area, meaning that if we can get re-centered at some point there is still a nice opportunity for profit.

The thing to keep in mind is that things could go the other way.  We always have to be prepared with a backup plan, which currently is that we will roll down if we hit the 460 point.  That's 20 points, which is a long way, but stranger things have happened, so I'm not ruling it out.  The best case scenario is that we have a relatively calm day tomorrow.  If so, the three day weekend, and three days of Theta to go along with it, will put us in a great position - even if we ultimately hit the 460 strike.  We're staying nimble...

Good Trading...