I want to talk about something that’s been looming over the stock market for a while now, and yet no one is talking about it: volatility. And, more specifically, how to trade volatility for the rest of 2021…
Because it’s about to explode worldwide, and there is nothing the Federal Reserve is going to be able to do about it. In fact, this avalanche of volatility that’s about to bury the global financial market alive is due to numerous mistakes the Fed made during this pandemic. And now, traders are going to be left scrambling to figure out how to trade this kind of volatility in the rest of 2021.
Yet no one is talking about it on any traditional media, and that scares me for the investors and traders who are about to be blindsided.
However, there is an incredible opportunity — opportunity being the key word here — in that looming volatility… if you know what to do.
How to Trade Looming Volatility in 2021
Take a look at the chart for the Cboe Volatility Index (VIX) over the past 31 years or so and you’ll notice something interesting…
Over the years, the VIX has delivered crazy spikes of movement to the up and downside of the market in a way that looks terrifying to the average trader.
However, I see it as a round trip opportunity to profit — both on the increase and subsequent decrease in volatility, which happens like weather .
And over the past three decades, when we’ve had major events hit the world like 9/11 or the financial crash of 2008 — perhaps even a pandemic… — we see shocking spikes and drops in volatility.
Back in the day, the VIX was something only a select few big-shot investors could access and trade. But now it’s something anyone can trade like stocks.
And it’s all because of this unbelievable ETF that trades like an absolute monster…I’m talking about a 30-million-shares-a-day kind of monster…
The Barclays iPath Series B S&P 500 VIX Short-Term Futures ETN (BATS: VXX) has amazing opportunities on the market whether it’s up or down, all the time.
In fact, just a few months ago this ETF made a 30% move in just a single day.
And I’ve noticed this trend is growing and becoming more frequent.
So much so that I’ve exploited it and developed an entire trading strategy around it.
Check out the video below to learn more about how to trade this kind of volatility in 2021, and my new trading strategy!
And send any trading questions to jeff@joyofthetrade.com and stay ahead of the markets, especially these choppy ones, by subscribing to our YouTube channel.
