Another VIX Spike
Setting Up a New Position in Coca-Cola
Two new headlines related to the US’ trade policy: a threat of tariffing Apple’s imported iPhones with a 25% rate, and the EU facing a straight 50% burden. As a result, the VIX is up to 25%.
As our research and strategy is built on scaling positions based on the VIX, today’s spike means we’re able to layer into higher options premium. Until yesterday, our excess cash allocation hit its highest level in a long time. We then put on a new position in Linde.
Today, at the opening, we’ll be executing a new trade on Coca-Cola, which should be viewed as a safe haven in today’s uncertain back-and-forth tariff talk.
Clearly, we don’t know what’s gonna happen next, but we remain non-emotional about how we gauge risk/reward: it’s much better to be more aggressive/seek long exposure when the VIX is high versus when it’s low.