Why You Should Sell High Volatility

So I sold some US market volatility by the way of the VIX and the Dow ETF, DIA. The VIX plummeted immediately, as I figured it would. That means volatility across the indices also dropped precipitously.

When I sold the DIA iron condor, IV rank was in the 99th percentile on a 52 week basis, indicating that IV pretty much was the highest it had been in a year.

US stocks had a couple day decline, and then once the Chinese government came out and said they would imprison short sellers, it was off to the mother fucking races.

LOOK AT THAT GAP N FLY. Totally irrational in my opinion, but so was the sell off so, I guess net-net nothing really happened. This pretty much happens after every couple day downturn. The Buy the Dip algorithms come swooping in and bid up the market once the all clear signal is given.

Here's the crazy part. A 6 point move higher in DIA has only resulted in the price of the 166/168/183/185 condor moving from 0.75 to 0.79! Only 0.04 against me!

IV rank dropped from the 99th percentile to the 14th percentile. That's why selling high volatility is so important. Now though, IV is probably the lowest it will get, so if DIA continues higher, it's going to start hurting more. There's some soft resistance just under 182, we'll see what happens. I've got that VIX victory money to hold me over for awhile if things get hairy.