VIX rallied in the last few minutes of 2018, but didn’t take the all the futures contracts with it. The near dated futures moved up slightly, but for the week the longer dated futures were slightly lower.
2017 is now officially the year with the lowest average close for VIX on record. The average close was 11.09 in 2017 which is 2.30 lower than the average close for VIX in 1995. The chart below is a favorite of mine showing the high, low, and average VIX by year from 1990 through 2017. Note VIX price action moves in waves and lower levels are usually and eventually followed by a rebound in VIX.
We all know VIX spiked to finish the week, month, quarter, year, on Friday. Many traders may have been on the early train home or off so they missed the end of the day move. At least one trader was at the helm and decided to step up and sell a VIX Jan 3rd 10.50 Call for 0.70 shortly before the end of trading. It appears VIX was at 10.60 and the Jan 3rd future was priced at 10.90 when this trade was executed.
This trade would make me nervous over the long weekend, but there’s a bit of a cushion even if VIX moves higher as the week resumes on Tuesday.