On Friday I held my first live session with the new 0DTE Cash Zone members. While I covered a lot of ground, the big thing I focused on was movement. The S&P 500 can move in either direction at any given moment, making it challenging to predict where the index will ultimately settle. However, movement is easier to predict. Why? Because options are CONSTANTLY pricing in movement. In fact, you could say that how much the market is moving is the number one factor in determining how expensive options are going to be. So, what’s the current trend—and how does it affect my trading? Here’s the good news: whenever you watch CNBC or check your brokerage account, you can see the market’s expected movement being shown in real time. That’s right—I’m talking about the VIX. The VIX is the market’s top way to measure how expensive options are. Since option prices depend on how much the market moves, the VIX basically tells you how much movement the market expects. Looking at the VIX, we can see a clear trend starting from April:  Movement is slowing down, and honestly, I couldn’t be more excited. When movement is low, it’s easier to predict what will happen. For example, if the market opens lower, it’s likely to stay down—just like it did on Friday:  When the market is up, it usually stays up and tends to drift even higher. When option prices are low, the market tends to be very bullish and trend friendly. That’s where 0DTE comes into play. On Thursday, Licia placed a bullish call trade in the morning when the market was already up — and sure enough, it kept climbing. If the VIX remains low, as I expect it will, and market movement continues to calm down, this will play into the hands of cash zone traders and 0DTE call buyers. That’s exactly why we launched 0DTE when we did. But it’s not just great for those strategies — many others will benefit as well. So, what should you do with this information? - Join 0DTE (little plug for myself)
- Watch the VIX like a hawk. If it continues to trend lower, the S&P 500 is going to be 6500 or higher by the end of the year
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