Volatility Remains Low

The Dow Jones Industrial Average closed at its highest level since June 19, 2008, even though the indices didn't make much progress. Overall action was upbeat as retailers, chips and regional banks lead the way, while gold slumped 2% and steel reversed after a big day yesterday. The soft spot in this market today was crude and commodity-related names but strong technology action made up for it.

The Dow ended up 4.39 points, or 0.04%, to close at 11,989. The S&P 500 rose 2.91 points, or 0.22%, to close at 1299, and the NASDAQ was up 15.78 points, or 0.58%, to finish at 2755.

The CBOE Volatility Index (VIX) closed down 2.94%, at 16.15 , on overall put volume of 289,000 contracts compared to 233,000 call contracts, with March 30 calls as the most active series. 60 and 90-day implied volatility moved lower from the close yesterday to trade at 70 and 66, respectively, indicating decreasing price movement in the outer months.

SPDR S&P 500 ETF (SPY) February 123/125/127 put fly traded multiple times and may have been added to positions opened on Tuesday when the same fly traded 50,000x. SPY touched another 52-week high to close up $0.32, at $129.99, on overall put volume of 1.38 million contracts compared to 434,000 call contracts. 60 and 90-day implied volatility is 15 and 16, respectively, indicating slightly higher price movement in the outer months.

The PowerShares QQQ Trust (QQQQ) touched a 52-week high to close up $0.35, at $57.18, on overall put contract volume of 307,000 contracts compared to 141,000 call contracts, with March 55 puts as the most actively traded series. 60 and 90-day implied volatility is at 17 and 18, respectively, suggesting little price movement in the outer months.

Notable companies reporting before the open include: AAI, ACI, CVX, D, DOV, F, HON, MBFI, OSK, SNV, TROW, WL. On the economic front, GDP and Employment Cost Index are due out at 8:30 a.m. EST and Consumer Sentiment at 9:55 a.m. EST.OptionsProfits For actionable options trade ideas from a team of experts, visit TheStreet's OptionsProfits now.

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