I am a trader, not an expert on geopolitical events. For me it’s important to stay focused on markets, namely price action and order flow. We knew that there was a chance of news over the weekend and we saw some interesting price action into Friday’s close. As far as Russia we actually saw a fair amount of options activity early last week in the Market Vectors Russia ETF (RSX), as traders positioned themselves for the weekend. Puts massively out traded calls on Tuesday and Wednesday as concerns over the situation in the Ukraine continued.
Today we are actually seeing the exact opposite; calls are out trading puts in the opening hour of the session as two huge blocks of short puts hit the tape this morning. A trader sold 9,650 then another 9,500 Mar 21 puts this morning for $0.40 indicating they believe RSX will stay above 21 through March expiration
Although it is an obviously tense situation I think if market participants were truly in a panic we would see a much larger move in the VIX. Although the VIX is up nearly 15% today it’s still only trading at 16. Traders can still buy relatively cheap protection and I still do not see a reason to get short the market. We overlooked some positive data this morning because of the Ukraine situation. Not time to panic yet.