Zee C O N T R A R I A N
@ZeeContrarian1
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Managed Accounts, Bespoke Advisory Services to Family Offices & Investment Funds. Former Wall Street focusing on contrarian situations and volatility.
Joined September 2013
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- Two years from now, the $UVXY will be below 10 (currently 55).
- While I can't guarantee it, I do.
- If you short volatility at $VIX 30, it's only a matter of time until you start printing money.
- Put a SMALL part of your portfolio here in short $UVXY and leave it alone.
The $VIX has increased by 88% over the past 3 weeks, the 15th biggest 3-week spike ever. Here's a look at how the S&P 500 has fared following big $VIX spikes in the past...
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To the Islamic government of Iran, I plead with you please do not attack the red dots on this map. Those are the holiest, most important places for the Jewish people. Please 🙏
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This is pure genius; $GME just reported a surprise earnings release as the company was unable to take any financial actions beforehand. The moment it released earnings, it immediately followed with the sale of 75,000,000 shares to raise more capital at the expense of average Joe.
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Summary of the GameStop ( $GME) trade so far:
2 billionaires got 1 billion $ of free PR
20 Reddit users became millionaires
2,000,000 people that joined late lost half of their life savings
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Half a million reasons to learn how the $VIX works, maybe 0.1% of fund managers do.
You can now hedge you portfolio with the October 17 $VIX 15-22 spread for a cost of $1.3. This spread has 42 days to expiration and should be rolled in 21 days if nothing happens and $VIX stays around 3 years low level; in this worse case scenario the spread will be worth ~$0.8.
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Before the Covid crash, I issued a warning stating that if you had closed your long portfolio each time the $VIX first contract crossed the second contract, known as backwardation, you could have avoided all market collapses.
Last week we entered again into backwardation.
VIX 1st future at 18.60 just surpassed VIX 2nd future at 18.30 which means VIX term structure is in Backwardation. If you closed your long portfolio every time this happened and waited for contango to return you WOULD HAVE AVOIDED ALL MARKET COLLAPSES THROUGHT HISTORY.
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VIX 1st future at 18.60 just surpassed VIX 2nd future at 18.30 which means VIX term structure is in Backwardation. If you closed your long portfolio every time this happened and waited for contango to return you WOULD HAVE AVOIDED ALL MARKET COLLAPSES THROUGHT HISTORY.
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My barber, who perfectly “nailed” the Bitcoin top in 2021, now believes it’s a perfect time to invest in artificial intelligence
#AI
#artificalintelligence
#BTC
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Being a contrarian does not mean to do the opposite of what others are doing. An intelligent contrarian has to know what others are doing, know why they are doing it, know whats wrong with what they are doing and than figure out if there is a appropriate action to be taken.
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A few hedge funds I consult entered the following trade for a credit this week:
Buy 1000 $VIX 30 June 15
Sell 2000 $VIX 40 June 15
They received $6,000 to enter the trade.
At $VIX 35 or 45 they make $500,000
At $VIX 40 they make $1,000,000
Start loosing VIX>50
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Norway's US$950 billion sovereign wealth fund - the world's biggest - is preparing to liquidate assets to cover government withdrawals. The fund is 70% in equity, top holdings include FANG, Nestle and Intel.
Tread carefully
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Elections and VIX
Build your $VIX positions NOW when the $VIX and the $VVIX are low; this won’t last forever.
I don’t not see $VIX below 13 as sustainable.
Place your bets NOW.
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Retail investors can now proudly claim that they have used their savings to support $GME, as every dollar that flows into the company's coffers is directly contributed by them.
Thank you for your sacrifice 🫡
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On Friday the $VVIX reached the lowest level since May 2015!
The $VVIX measures how much people expect the $VIX (fear index) to move in the future.
The $VVIX can be thought of as the $VIX of the $VIX, as it measures the expected volatility of the CBOE Volatility Index (VIX).
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If history repeats itself, this Dec 15, $UVXY trade will make you a millionaire:
Buy 15 put
Sell 30 put
Sell 10 put
Pay $0
Logic: in the past 3 years when Q3 was weak 4Q was AMAZING.
Also, December is the lowest volatility month of the year.
See pictures below
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How it started; how it’s going.
$VIX
New $VIX position for August 20, willing to sit and wait.
Buy 1 11 call
Buy 1 55 call
Sell 2 13.5 puts
Sell 2 18 puts
Pay: -$0.1
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It's time to close the $VIX position; the only thing holding up volatility at the moment is the anticipated Iranian retaliation. Once that subsides, the $VIX will decrease. We initiated this trade at $0.2 and saw it soar to $3.2, translating to a remarkable 1500% gain.
Well done
Betting on a Range in $VIX
I often mention the strategy of "Betting on a Range in the $VIX," utilizing both $VIX spreads opened at $VIX 12 and $UVXY put spreads opened at $VIX 17. The aim is to pinpoint an area that I consider fair value, rather than concentrating on a direction.
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Wow, opportunities like these are rare, so it's essential to seize the moment before it passes. The $VVIX is currently at a historic level, indicating that options are at their peak prices.
Ratio spreads heaven that should fix your portfolio for the rest of the year.
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History doesn't repeat itself, but it sure rhymes.
Half a million reasons to learn how to use the $VIX part 2.
Half a million reasons to learn how the $VIX works, maybe 0.1% of fund managers do.
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500,000 Reasons to Learn how to trade the $VIX:
How it started, how it ended.
3rd time in the past year, same same but different.
New $VIX position for August 20, willing to sit and wait.
Buy 1 11 call
Buy 1 55 call
Sell 2 13.5 puts
Sell 2 18 puts
Pay: -$0.1
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The Story of the Mexican Fisherman
An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna.
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Risk Management for $VIX Positions
My risk management system is straightforward: if $VIX futures enter backwardation (front month surpasses the second), I exit. This rule would have shielded you from EVERY $VIX spike since $VIX options started trading in 2006.
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TRADING ALERT
We are starting today AGAIN to build a long position on $VIX with the usual contrarian style.
Let’s see if we hit $500,000 again.
Second $VIX position that reached $500K in profit in the last 30 days. As I said before, Israel and Iran do not equal War World 3.
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Ill put forth one simple example before market opens on Monday.
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When a company such as FedEx ( $FDX), which is the barometer of the economy, falls 10% as it withdraws the FY23 earnings forecast, you know that the market has a lot of room to go down because such a fall means nothing is priced in yet.
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If you are a retail investor, this is a good time to start going short $VIX by buying $SVIX or if you can shorting $UVXY.
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A few examples of how I used the high $VVIX, which implies that option premiums are rich, to build $UVXY combos.
My thesis (which can change any day) is that $VIX can’t go much lower with the current macro/elections/cycle, so I sell a ton of low puts to finance higher puts.
Elections and VIX
Build your $VIX positions NOW when the $VIX and the $VVIX are low; this won’t last forever.
I don’t not see $VIX below 13 as sustainable.
Place your bets NOW.
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THE PATH TO ATTAINING INNER PEACE has been a interesting journey for me as I cannot recall the last time I felt sad, angry, frustrated, or envious. Although negative emotions do surface every once in a while, their presence is fleeting.
But how did I achieve this state?
🧵
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Second red day for both the $VIX and the S&P; this almost always signals a short term market bottom.
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Got some messages like "Zee, you're handsome, share your trades!" and "Zee, your Jesus-like hair is divine! Post your trades!" So, charmed and convinced, I'll post my exact trade ideas tomorrow!
$VIX
Half a million reasons to learn how the $VIX works, maybe 0.1% of fund managers do.
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I own a couple of Appartments in the United States where blue collar families stay, I called them today to tell them not to worry about the rent until this thing gets fixed and just keep themselves safe. The last thing they should worry about is having enough money for rent
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2023, the market Battle of Witts has begun.
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Every time I have a worry about a futuristic event, I sit in quietude and meditate on the wise words of emperor Marcus Aurelius: "Never let the future disturb you. You will meet it, if you have to, with the same weapons of reason which today arm you against the present."
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A $VIX level of 30 implies an expected daily move of approximately 1.87% in the S&P 500. This means that based on historical volatility and option pricing, the market anticipates the S&P 500 to fluctuate by about 1.87% on a daily basis.
This can’t last forever.
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For just $0.3, you have the opportunity to place a bet on a negative event occurring within the next 64 days. If the event happens, you will start earning profits above the $VIX level of 13.3 within this 64-day period.
Good for hedging, good as a trade.
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New, Huge $VIX position.
Cost: $0.65c
Break-even: VIX 13.65 - 26.35
Max Progift: VIX 20 (1070%)
Expiry: May 21
Comment: For simplification, do use stop loss if $VIX goes into backwardation due to a systemic event. Following this would have saved you since the invention of VIX.
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NewTrade, buy $VIX Sep 17 20 Call, Sell 2 $VIX Sep 17 35 Calls.
The risk management is the size, if $VIX stays around these levels great, if it goes up great, if it goes down the position won’t loose a lot of value anyways.
Small position, start loosing $VIX 49. Max profit 35.
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3rd $VIX trade this year that will reach $500,000?
Honestly, this trade was incredibly straightforward for anyone familiar with $VIX seasonality and wise enough not to equate the sub-10 $VIX levels seen during the Fed's accommodative period with the current market conditions.
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$UVXY is a mathematically flawed instrument that will always eventually go to zero (although it doesn’t due to reverse splits), making profit from shorting it inevitable.
2018: 63%
2019: -85%
2020: -14%
2021: -88%
2022: -44%
2023: -88%
YTD: 42%
Much better than
#BTC
guaranteed.
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Notice how each volatility regime is different, trading $VIX based on historical data is pointless. The $VIX is the best trading asset class because:
1-High volatility is not sustainable.
2-Volatility is mean reverting.
3-It moves in ranges that last for long periods of time.
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The same way the $VIX tells you how expensive are options on the $SPX / $SPY, the $VVIX tells you how expensive or cheap are options on the $VIX. As you can see below, today options on the $VIX are the cheapest as they have been in two years as we enter a possible volatile week.
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Five Lessons from the Stoic, Seneca
1) We suffer more in imagination than in reality.
2) Associate only with people who improve you.
3) The greatest remedy for anger is delay.
4) Value your time more than your possessions.
5) You are dying every day.
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The $VVIX is currently approaching its lowest level in 8 years. This indicates that volatility is CHEAP. Thus, you can now buy the $VIX March 19, 13-22 spread for $1.9. So 68 days for expiration and a break even at 14.9.
-You hedge when you can, not when you need.
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Get ready for the most remarkable trade I have come across this year. I will provide a comprehensive analysis that elucidates why this opportunity has surfaced at this moment. Moreover, I will unveil the unique approach I recommend for taking advantage of it.
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Oil prices are near yearly lows due to recession concerns, despite looming tensions between Iran and Israel. Historically, such events have boosted oil prices. I suggest the following short-term options trade on Oil expiring on Aug15:
- Buy 74 c
- Sell 76 c
- Sell 70 p
CR: $0.05
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$VVIX is likely to reach levels today that were only seen during the peak of the COVID-19 crisis, a time when genuine concerns about the future of humanity were prevalent.
This clearly indicates a state of absolute panic in the $VIX options market.
Opportunities abound.
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I do not recall any other time in the past 10 years where I got so many calls from “dumb money” saying they want to start putting money into the stock market than this past weekend.
That reinforces my thesis we are near or at a SHORT TERM TOP.
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Every time I hear
@elonmusk
focus on the future in $TSLA earnings, I know the present is fucked.
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20 years in the financial markets and I have yet to encounter a person who can predict what the markets will do next or when the $VIX will spike. Stop asking dumb questions about what happens next; no one knows. What I do know is that given enough time, the $VIX will go above 14.
New $VIX position for August 20, willing to sit and wait.
Buy 1 11 call
Buy 1 55 call
Sell 2 13.5 puts
Sell 2 18 puts
Pay: -$0.1
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In a good market, the day starts low and ends high, whereas in a bad market, the day starts high and ends low.
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It took the market 5 years to find some event that will lead to price discovery, it took the Federal Reserve 2 weeks to put it back to sleep.
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When discussing this event with clients, I compared it to the 2018 volmagedon, a bullshit event that provides a once-in-a-lifetime opportunity to short volatility.
$VIX, $UVXY, $VXX
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You can now hedge you portfolio with the October 17 $VIX 15-22 spread for a cost of $1.3. This spread has 42 days to expiration and should be rolled in 21 days if nothing happens and $VIX stays around 3 years low level; in this worse case scenario the spread will be worth ~$0.8.
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Views from my balcony in Ericeira , Portugal
4 years ago my inner voice told me it’s time to leave the suit behind and go on an adventure, I have been living around the world ever since. If you put any animal in a golden cage it would not be happy yet sapiens make it their goal.
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New $VIX position for August 20, willing to sit and wait.
Buy 1 11 call
Buy 1 55 call
Sell 2 13.5 puts
Sell 2 18 puts
Pay: -$0.1
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A few weeks ago, a portfolio manager inquired about the ideal allocation for the $VIX trade I constructed for him. Without hesitation, I recommended allocating the entire portfolio to it. You are basically buying the $VIX at 11 and you have 2 months for it to cross 13.5, insane.
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Two unpredictable events are your time of death and the next market crash. This uncertainty is why you buy life insurance when you are healthy and premiums are low, and invest in $VIX when it is trading at low prices.
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If today were the bear market bottom it would be the highest P/E for the S&P of any bear market low since at least 1957. Average bear market low P/E = 12.6x, current P/E = ~17.0x. And that’s before the substantial earnings downgrades we should see next year.
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Betting on a Range in $VIX
I often mention the strategy of "Betting on a Range in the $VIX," utilizing both $VIX spreads opened at $VIX 12 and $UVXY put spreads opened at $VIX 17. The aim is to pinpoint an area that I consider fair value, rather than concentrating on a direction.
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When you short the $VIX in the 30s via $UVXY, $VXX or $SVIX (disregarding the fact that the index was at 60 as it is not tradable), there are two potential outcomes: either volatility will normalize over time, leading to significant profits, or the world as we know it will end.
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$125K taken as profit, approximately $530K remaining on the table. I reached out to all my clients when this trade opportunity was open to emphasize why it seemed too good to be true.
Do you have any exposure to $VIX?
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"In investing, always remember that Rome was not built in a day."
"In trading, always remember that Hiroshima and Nagsaki were destroyed in a day."
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What VIX Levels Tell Us About Expected Market Movement (Simplified)
VIX Level Expected Daily Range
16 1%
24 1.5%
32 2%
48 3%
64 4%
80 5%
Also known as the Rule of 16.
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Had a bad day? Got stuck in traffic? Your boss pissed you off? Did someone cut you in line? Just not in the mood? This is Dani, and she has stage 4 cancer(the worst kind), the kind that is not about “if” but rather “when”.
She had a great day.
#PERSPECTIVE
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One of the best lectures I have ever seen on risk and volatility by Howard Marks,
@Oaktree
Capital Co-Chairman.
I recommend watching it at least 3 times and to take notes while you do.
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Five times this year, the $VIX traded above 30 for five consecutive days while in backwardation; in all five cases a rally followed.
#BullishAF
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The current 1.04% $VIX contango reflects the monthly loss incurred by $VIX products, making it unwise to short $UVXY and $VXX or to go long on $SVIX due to the unfavorable contango conditions. BUT, the higher the $VIX goes the greater the opportunity to short it will be.
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If you are unable to short $UVXY, you can do better. This strategy aims to serve as a substitute for a short $UVXY position. Ensure to employ a limit order to secure the most favorable price within the bid/ask spread.
Worst case you get assigned $UVXY at $80.
Small position
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The Israel-Iran situation has been somewhat de-risked. When you add a market that is already down 5% in the past month, you get a perfect situation to short volatility rather than buy into panic.
$VIX
$UVXY
$VXX
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One day you will wake up & there won’t be any more time to do the things you’ve always wanted. Do it now.
-Paulo Coelho
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Using the VIX to time the market, general rules:
Market down+VIX down=bullish for stocks.
Market up+VIX up=bearish for stocks.
Market down a little+VIX up a lot=very bearish.
Market down a lot+VIX down=capitulation, get ready to rally.
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Most Americans are financially illiterate, if they only understood that a bailout basically means the government is taking now money from their future grandkids to save some companies that overpaid some incompetent, rich CEO and board members there would be total anarchy around.
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Comparing Returns of Short $VIX Instruments Over the 12 months.
Short $UVXY: +31.39%
Short $VXX: +12.04%
Long $SVXY: -7.03%
Long $SVIX: -30.66%
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Often alone, never lonely.
Prague, Czechia.
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I would say, BUY EVERYTHING. Rally until 2023. That’s what the $VIX says.
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I repeatedly emphasize that the extended period of the $VIX below 13 that we witnessed during the FED put policy era should not be equated with the current monetary policy. It is inconceivable to me that you would take monthly bets on the $VIX being above 13.5 for a few pennies.
Current $VIX positions, no short $UVXY positions. The April positions in a sense hedge the May positions. I mentioned before the basic rules on when to close these positions.
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After a one month break from equity research, I have moved to the scenery and quiet northern part of Ibiza so I can start getting some work done with little interference.
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I've never aspired to be wealthy; my goal has always been to have enough to live without concern, and I quit once I achieved that. The path to wealth for many involves benefiting at the expense of others or devoting their entire lives to work, neither of which resonates with me.
BREAKING: The SEC is suing short-seller Andrew Left and Citron Research for stock manipulation.
The SEC alleges that Left and Citron committed fraud and made illegal profits.
Citron Research recently announced they were short Gamestop, $GME, in a post on X.
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The $VIX is spiking 8%!!!
Well, not exactly.
What you are seeing today is the $VIX weekend effect, which I wrote about before. Basically, the spot $VIX, which is non-tradable, usually spikes on Mondays. Therefore, it's best to focus on the $VIX futures for more accuracy.
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Thank you, god, for creating me too dumb to understand cryptos.
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I read a nice quote today that said, "How people treat you is their karma; how you react is yours."
🙏
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$BABA is my 4th largest position (via options). Despite analyst opinions focusing on its undervaluation, I believe in its potential due to completed selling pressure and the company's significant buyback program (~10% yearly), acting as a catalyst for value appreciation.
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In a mother’s womb were two babies. One asked the other: “Do you believe in life after delivery?”The other replied, “Why, of course. There has to be something after delivery. Maybe we are here to prepare ourselves for what we will be later.”
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Monday will be a long $BAC, $JPM, $C, $WFC day. This might prove to be a generational opportunity.
No matter how this ends, every company in its right mind will only bank with a bank that is too big to fail going forward.
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Second $VIX position that reached $500K in profit in the last 30 days. As I said before, Israel and Iran do not equal War World 3.
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I TOLD YOU, I TOLD YOU, I TOLD YOU.
And then, I TOLD YOU AGAIN.
Got $VIX?
Elections and VIX
Build your $VIX positions NOW when the $VIX and the $VVIX are low; this won’t last forever.
I don’t not see $VIX below 13 as sustainable.
Place your bets NOW.
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I have been buying a small biotech company that I belive is totally misunderstood by the market, I will publish my research tomorrow.
Previous biotech conviction picks,
~recommendation price->top price
$ODT $15->$45
$VBIV $0.5->$6
$KMDA $5->$12
$MDWD $2->$4
$LJPC $2.6->$11
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The only way to make money from charts is to sell people courses on how to make money from charts.
Liking this $SOXL setup here... a multi-day bounce brewing here.
Thinking many squeezes should begin to take place in technology/semis sectors as we move past 2pm today
Targets $22 to $24 areas
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King Solomon and the Buddha taught us the importance of the 'middle way'. When we have too much, we can become obsessed with materialism. Having too little leads us to focus on survival. Having what you need leads to a clear path to spiritual growth, the highest purpose of life.
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The fastest decline in $UVXY history! I must admit, I was also surprised by the speed of the decline.
- Two years from now, the $UVXY will be below 10 (currently 55).
- While I can't guarantee it, I do.
- If you short volatility at $VIX 30, it's only a matter of time until you start printing money.
- Put a SMALL part of your portfolio here in short $UVXY and leave it alone.
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Two millennia-old wisdom that relates both to life and investing,
“Never let the future disturb you. You will meet it, if you have to, with the same weapons of reason which today arm you against the present.”
-Marcus Aurelius, Roman Emperor, Meditations
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I'm starting to be on high alert for a short setup on $UVXY in the coming days. For those unfamiliar with $UVXY and $VXX, I advise you to do your research.
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While I don't have a particular stance on
#BTC
, let me share this advice with holders: Think about how your life could change with a drop to $30,000 versus a surge to $100,000.
As Warren Buffet wisely said: "Never risk something you need for something you don't need."
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Temporary Bottom Reached
$USD: Down
$BTC: Up
10 Year Treasury April 2010: Rejected
2 year Treasury August 2007: Rejected
S&P 500 Support:Held
Everyone: Pessimistic
Fear & Greed Index: Extreme Fear
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Kevin O’Leary received 15 million dollars from SBF to be his fluffer and promoter. Due to his status as a T.V. persona, he was able to lure thousands into the FTX platform and helped them lose their life savings. For some reason,
@CNBC
keeps giving this clown audience.
Disgrace.
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Profit taken, position closed.
- $VIX
Half a million reasons to learn how the $VIX works, maybe 0.1% of fund managers do.
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“Rich? Then what?”
The American said, Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar.
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Having Cathie Wood's $ARKK on your watchlist is like having cocaine on your work desk. There will be a point in time when, in weakness, you will think it's a good time to give it a go, and the results are predetermined to be catastrophic.
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