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Back on March 6, I bought Call Options on the CBEO S&P 500 Volatility Index (VIX) at a strike of 23 for the May 17 and June 21 expirations for my Volatility Portfolio on my subscription site.

My logic was that at 18 or so, the VIX was trading at a level that basically ignored all of the potential negative news and trends visible in the financial market for the next couple of weeks.

I certainly didn’t count on the collapse of Silicon Valley Bank or the wave of fear that has today overwhelmed shares of every regional and fintech bank.

I think the odds are that the crisis won’t go away, but that the extreme fear of today will turn into something less extreme over the next day or so. Fear tends to work like that in the financial markets: When investors and traders discover the sky hasn’t fallen today, they get more optimistic (not always reasonably) about tomorrow.

So I’m selling the May 17 Call Option on the VIX that I bought on March 6. The purchase price that day was $$94 per contract. The price today closed at $420 per contract. That’s a gain of 116%.

I will continue to hold onto the June 21 Call Option on the VIX with a strike price of 23. This option has a longer duration so there’s more chance for more to go wrong. That position was up 81% as of the close today, March 13.

I will consider rebuying the VIX Call that I sold today if optimism breaks out, although I would probably look at adding to the June 21 position or going out a bit further to the July 19th expiration date.

The VIX itself closed up another 5.40% to 26.49. That’s still low. The financial markets are not yet pricing in the end of the world.