The VXN:

The VXN is a measure of the volatility of the NASDAQ 100 Index. Changes in the VXN help determine option premiums of the MNX (a higher VXN means increased option premiums, particularly in puts, while a decrease will generally mean lower premiums). Today's change in the VXN of 10.18% (closing level of 47.50), while below the October VXN high of 86.52, marks the largest volatility increase in more than a month. Generally when I look to put on a new trade, I gauge the current level of the VXN to see if waiting for an increase will provide a few dollars more of premium. I am looking to place a few March put trades, possibly in the 77.50 - 82.50 range (30.5% - 34.5% out of the money with 30 days to expiration). As of today, selling 10 contracts would produce a credit of between $180.00 ($7,750.00 margin) - $280.00 ($8,255.00 margin). The simple return would be 2.32% and 3.40% respectively. The money market equivalent yield would be 28.5% and 41.5% respectively. However, with today's turbulent market, I may wait a day or so to see how the market plays out - just in case I can increase the premium I would receive, or receive the same premiums, but for a lower strike. Please view my disclosure on the bottom of this blog.