Why 40 Might Be The Magic Number

I can't tell who's more obsessed with the number 40 - Jennifer Aniston or the avergae options trader. I'm gonna put my money on the latter, despite what People Magazine may say.

Today, the VIX again broke through 40, albeit slightly, reflecting the hopes that things may be settling down a bit.

"The VIX is reflecting the improvement in the credit markets," said Brian Stutland, president of Stutland Equities and "Options Action" trader. "But the uncertainty that remains in the market is propping the VIX up. Also don't forget, the market is still moving 2% a day on average, and that's what the VIX is telling you," said Stutland.

One point to make here: the VIX is commonly called the Fear index, as it tends to move higher as stocks tank. But it's really more of a movement index.

"Volatility can work both ways," said Options Action star Mike Khouw. "Stocks can go up, or they can go down. When the market stops moving, that's when we'll see a meaningful retreat in the VIX.

However, Khouw points out that VIX futures remain over 40, indicating that big moves in stocks may be just around corner, a not entirely implausible scenario with earnings season now underway.

Questions, comments send them to us at: optionsaction@cnbc.com

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    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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