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All quiet on the NYSEtern front?

Aug. 17, 2009 1:25 PM ET
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Historically August marks holiday season for society and the markets. Employers calling the shots find themselves on deck chairs sipping piña colada's on a beach - nice for some! Namely, Robert Benmosche who recently took over at AIG is spending the first month of his tenure touring the Croatian archipelago.

So how do we take advantage of holiday takers!? Shorting volatility or going short straddle spreads with August expiry dates would have been clever. But with volatility already low, it may be wise to strategize long term and go long volatility. Large positive premiums on VIX futures support expectations for a rougher Autumn. Why not use options with January expiry dates and buy a straddle or Strangle on the S&P index. This will pay off if we see ANY major moves in the equity markets in the Fall which historically is a game changer.

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