SPY was flat today—down just 0.01%. A “nothingburger” day at first glance. And if you look at the past six months? We’re basically right where we started. Feels like we’ve been running in place.
But here’s the interesting part: The VIX dropped 1.44 today. And that might make it seem like fear is falling too. But don’t be fooled.
The market is closed tomorrow (Thursday), then we get just one more day of trading on Friday before the weekend. That’s 3 non-trading days and 1 trading day ahead. Which means: 4 days of theta decay coming fast.
Options are getting cheaper not because volatility is truly dropping, but because time is evaporating. Traders start pulling theta out in advance—especially before long weekends—to avoid getting hit all at once.
The VIX model sees cheaper option prices and assumes “less fear,” but that’s a false signal. This isn’t about lower implied volatility—it’s about time decay being front-loaded.
So if you’re looking at the VIX thinking, “Hey, we’re in the clear!”—not so fast. There’s more going on behind the scenes.
#OptionsEducation #ThetaDecay #VIXExplained #WealthBuildingWithOptions
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