This Hedge Fund CIO Says VIX at 19 Is Still Too High. Here Is Why

The Nasdaq just finished its best quarter since 2020, which means markets have rewarded sellers of volatility and dip buyers all year. Chris Vecchio sits down with Noel Smith, CIO of Convex Asset Management and a former large-scale options market maker, to talk about what happens when that regime changes. Noel just bought ratio put spreads on VIX, expects vol to grind lower toward 17 or 18, and explains why correlation trading beats blanket S&P puts when only a handful of names are driving index moves. He breaks down VIX call spreads as portfolio insurance, why hedging trades are the only trades that lose money consistently, and why zero DTE options stabilize the market instead of breaking it. Most rich options traders are net sellers for a reason. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 Best Nasdaq quarter since 2020, regime change risk 02:00 Implied correlation at decade lows is mispriced 03:55 Selling VIX at 6 looks smart until it rips to 14 04:30 How Convex builds its own correlation methodology 05:50 Ratio put spreads on VIX: the trade Noel did today 07:00 Vol curve in modest contango, vol can still come in 08:35 Christmas in July seasonality is voodoo 10:00 Reflexivity in volatility and technical analysis 10:20 Buying convexity efficiently with VIX call spreads 12:00 Zero DTE is liquidity, not financial Armageddon 13:35 How market makers actually hedge zero DTE flow 14:00 Most rich options traders are net premium sellers #tastylive #tradingtrends #vix #volatilitytrading #zeroDTE #optionstrading #hedgefund #optionsstrategies #marketmaking #tastytrade tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.