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Time to Buy Volatility

Jan. 20, 2011 3:10 AM ETSPY
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- My proprietary, Fair Volatility Estimate indicator's value is 13, while mean implied volatility on SPY is 14.6. While SPY implied volatility is above FVE indicator's value, I believe one should be looking to buy options and buy volatility because FVE indicator has crossed above its moving average from low levels.

- I would also think that buying the Feb 128/125 put spread and selling Feb 132 call for under 0.30 would be a good trade to put on for a possible correction.

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