Skip to main content

The Final Bell: A Look at Today's Market Sentiment - May 18th, 2023

Market Sentiment

In this market sentiment report, we will analyze the VIX option data based on the closing values as of today. The VIX closed at 16.05, which is lower than both the 10-day moving average of 21.62 and the 200-day moving average of 20.36. Additionally, the S&P 500 index closed at 4198.06, higher than the 10-day moving average of 3985.58 and the 200-day moving average of 2218.15. This report will provide separate analysis for call and put options, and suggest possible market directions in the short term and long term based on the data.

Call Option Analysis

The total call volume for VIX options traded today was 1,027,760 contracts. Out of this, 147,729 contracts traded at the bid or below, while 182,505 contracts traded at the ask or above. The majority of contracts, totaling 697,526, traded between the market spread.

When considering delta-wise call option volumes, 1,104,267 contracts were traded for 0-20 delta calls, followed by 625,155 contracts for 21-40 delta calls. The 41-60 delta call option had a volume of 270,262 contracts, while 13,932 contracts traded for 61-80 delta calls. Lastly, contracts traded for 81-100 delta calls were 1,746.

Put Option Analysis

The total put volume for VIX options was 447,362 contracts. Among these, 116,848 contracts traded at the bid or below, while 30,195 contracts traded at the ask or above. The majority of contracts, 300,319 in total, traded between the market spread.

Examining delta-wise put option volumes, 17,303 contracts were traded for 0-20 delta puts, followed by 34,103 contracts for 21-40 delta puts. The 41-60 delta put option had a volume of 5,534 contracts, while 2,097 contracts traded for 61-80 delta puts. Lastly, contracts traded for 81-100 delta puts were 388,325.

Short Term Market Direction

Based on the VIX option data, the market sentiment suggests a potential bullish outlook in the short term. The S&P 500 index is trading above its 10-day moving average, and the VIX is lower than its 10-day moving average. Additionally, the IV percentile of 30% indicates relatively low implied volatility.

Long Term Market Direction

In the long term, the market direction also appears to be favorable. The S&P 500 index is above its 200-day moving average, and the VIX is trading lower than its 200-day moving average. The overall trend suggests a positive market sentiment in the long term.

Conclusion

Based on the VIX option data analysis, the short-term market direction suggests a bullish sentiment, supported by the VIX closing below its moving averages and the S&P 500 index performing well. The long-term market direction also appears positive, with the VIX below its 200-day moving average and the S&P 500 index exhibiting a strong trend. Investors should continue to monitor the market dynamics and adapt their strategies accordingly.(Read more on "How to secure your family's financial future ")

Glossary

  • VIX (CBOE Volatility Index): A real-time market index that represents the market's expectation of 30-day forward-looking volatility.
  • Call and Put Options: Financial contracts that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a specified time period.
  • Delta: The measure of how much an option's price will change for every $1 change in the underlying asset's price.
  • IV (Implied Volatility): A measure of the market's expectation of the underlying asset's volatility.
  • Put-to-Call Ratio: The ratio of the total trading volume of put options to call options.
  • Sizzle Index: A measure of option volume relative to the normal level of trading activity for the underlying asset.
    • Disclaimer

    The information provided in this article is for educational purposes only and does not constitute financial or legal advice. Please consult with a financial advisor or attorney before making any investment decisions or creating an estate plan.

    The information provided in this financial blog is for educational purposes only and does not constitute financial advice. Please note that the views and opinions expressed in this blog are solely those of the author and do not necessarily reflect the official policy or position of his firm. The content of this blog is based on the opinions of the author and should not be relied upon as a substitute for professional advice. Before making any financial decisions, readers should consult with a financial advisor or other professional to discuss their specific situation and investment objectives. The author of this blog is not responsible for any losses, damages, or other liabilities incurred as a result of using or relying on any information provided in this blog. All information provided in this blog is accurate and reliable to the best of the author's knowledge, but no representations or warranties are made regarding its accuracy, completeness, or timeliness. The author reserves the right to change or update the information provided in this blog at any time without notice.

    Follow us on Instagram and YouTube @investorsbrew

    Labels:

    Comments

    Post a Comment

    Popular posts from this blog

    Money Matters: Fun and Practical Ways to Teach Kids About Finances, Savings, and Investing!

    Money Matters: Fun and Practical Ways to Teach Kids About Finances, Savings, and Investing! 1. Set up a piggy bank or savings jar: One of the simplest and most effective ways to introduce children to the concept of saving money is by setting up a piggy bank or savings jar. Provide your child with a designated container where they can collect their coins and bills. Encourage them to save a portion of their weekly allowance or any money they receive as gifts. As they see their savings grow, they will begin to understand the value of setting money aside for future needs or wants. To make it more engaging, consider personalizing the piggy bank or savings jar. Let your child decorate it with their favorite colors, stickers, or drawings. This will create a sense of ownership and pri
    Post a Comment
    Read more

    Empowering Young Females: Securing Financial Futures through Investing

    Empowering Female Investors Introduction: As young females navigate the journey of life, it is crucial for them to take control of their financial future. However, many face unique challenges and concerns, such as dependency on male partners for financial decisions and the potential risks associated with loss or separation. In this blog, we aim to motivate young females aged 20-55 to start investing and empower them to secure their financial well-being. Let's explore some actionable steps and strategies that can help young females pave their way to financial independence. 1. Breaking the Chains of Dependency: Dependency on male partners for financial decision-making is a common challenge that young females face. This reliance not only limits their financial independence but also puts them at a disadvantage if circumstances
    Post a Comment
    Read more

    Today's Options Trades with a Hypothetical Model

    Options Trade Suggestions Dear Readers, Please note that the following content presents hypothetical potential options trades for educational purposes and discussion only. It is essential to exercise caution and consult with a qualified financial advisor or professional before engaging in any options trading activities. The purpose of this content is to stimulate thought and provide a platform for educational discussions surrounding options trading strategies. The trades presented are purely hypothetical and should not be construed as investment advice or recommendations. Options trading involves inherent risks, including the potential for substantial losses. Prior to executing any trades, it is crucial to conduct thorough research, evaluate risk factors, and consider individual financial go
    Post a Comment
    Read more