Intermediate Trade: VIX

The French elections have really seized the overall market. With good reason: Take a look at what has happened to volatility over the last few elections where the "smart money" thought it knew what was going to happen. For this reason, VSTOXX, which is the VIX for the Euro Stoxx 50 (the S&P 500 of Europe) is near 25%. That is really high given that movement in the index over the last 10 trading days has been about 7.5%. That just shows how much fear is built into the market right now.

Euro Stoxx 50 ETF (FEZ) represents the Euro Stoxx 50 here in the U.S. While in the past it was not an active ETF, volume has blown up in this name, with the ETF trading up to an average of 2.5 million shares. Open interest in the options has ballooned to almost a million contracts and volumes are getting near 20,000 contracts a day. Today, a customer bought 28,000 of the April $35.50-$33 put spreads paying $0.65 in what is clearly a hedge against a long stock position. I think we will see much more of this over the coming days....145 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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