A technology sell-off and a jump in volatility hit the account
On Thursday investors moved out of technology. The Nasdaq-100 fell 2.90% and QQQ 2.86% to 704.47; for the Nasdaq Composite it was the worst day since June. The S&P 500 lost 1.21%, while the equal-weight S&P 500 rose 0.73%: the pressure was concentrated in the largest companies. Meta Platforms fell almost 7% despite a strong quarterly report, as investors focused on the scale of its future AI infrastructure commitments. Amazon, Nvidia, Broadcom and chipmakers broadly followed. Higher oil prices on Middle East tensions added to the unease, while demand for Treasuries pulled the 10-year yield down 17 basis points to 4.96%.
Volatility rose sharply. VIX gained 2.35 points to 19.03 and VXN 4.30 points to 28.72; 30-day QQQ implied volatility (own calculations) rose from 21.51% to 25.49%. VIX/VIX3M climbed to 0.946, just below the Tense threshold of 0.95; on the Convexa scale the regime formally stayed Normal.
The account closed the session 17.70% lower, against a 1.18% decline in SPY. Most of the loss came from short long-dated puts: the market decline and the rise in implied volatility increased their value at the same time. Gains on the short calls offset only part of that loss. The structure was partly adjusted in the middle of the session. Month to date the account was down 33.37%; since the start of the public record on 5 August it was up 2.53%, against −0.73% for SPY.
At the close the weekly QQQ straddle priced a move of ±1.44% to the Friday 23 October expiry. Friday brings the flash PMIs and the final University of Michigan sentiment reading. The Fed meets on 27–28 October and remained in its blackout period.
Editor’s Note reflects the author’s market perspective at the time of publication and should be read as commentary, not investment advice.
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