Free Trading Resources<\/strong><\/p>\n Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n You see, VIX options are not like most stock option contracts, which can be exercised<\/a> at any time.<\/p>\n VIX options are European-style contracts – meaning they can only be exercised on option expiration day. This eliminates any possible “arbitrage<\/a>” effect (the act of buying an option, exercising it immediately, and then selling the underlying security for a profit). So, VIX options will often trade at a discount to intrinsic value.<\/p>\n For example, on Wednesday, the VIX closed at 21.60. At that level, the VIX January 27 $23 puts were intrinsically worth $1.40. But, they were offered at only $1.00. That’s a $0.40 discount to their intrinsic value.<\/p>\n If it existed on a regular, American-style stock option, you could buy the put, exercise it, and liquidate the position all day long – picking up $40 for every contract you traded. The European-style feature prevents that from happening – because you can only exercise the contract on the January 27 option expiration day.<\/p>\n Because of this unique pricing structure, VIX options provide terrific clues about where most traders expect the VIX to be on option expiration day.<\/p>\n The VIX January 27 $23 call options – which were $1.40 out of the money<\/a> – closed Wednesday and were offered at $1.60.<\/p>\n In other words, traders were willing to pay more for a VIX call option that was $1.40 out of the money than for a VIX put option that was $1.40 in the money<\/a>. This tells us that traders who are making bets on the VIX expect the index to move higher over the next week.<\/p>\n This sentiment is even more evident if you go out a little further and compare the VIX February 17 $23 calls to the VIX February 17 $23 puts. The calls closed Wednesday offered at $3.70, while the puts were only $1.85. (I use my trading quote system to track these prices, but you can find them at FreeRealTime.com<\/a><\/strong>.)<\/p>\n VIX calls are far more expensive than the equivalent VIX put options. So, VIX option traders clearly expect the index to move sharply higher between now and February 17. And, a rising VIX (rising volatility<\/a>) usually accompanies a falling stock market.<\/p>\n So, if you’re making short-term bullish<\/a> bets, be careful. The VIX “crystal ball” has a very good track record… I’m betting it’ll prove correct this time, as well.<\/p>\n Best regards and good trading,<\/p>\n Jeff Clark<\/p>\n P.S.<\/strong> VIX options are just one of the many tools I use to find winning trades for my Delta Report<\/em> subscribers.<\/p>\n Just in the last few weeks, we’ve booked wins of 80%, 100%, and 140% using my trading toolkit<\/a>. And, I think there’s far more profits to come.<\/p>\n In fact, just yesterday I recommended a trade in the telecom sector that I think has 130% potential in the next month. And, it’s still in my recommended range. To see how you can access it, just click here<\/a>.<\/p>\n Have you profited from Jeff’s “crystal ball” predictions in the past?<\/p>\n![](\"https:\/\/casey-assets.s3.amazonaws.com\/images\/misc\/jeff-clark-signature.png\")
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