#UVXYUSDT is making a short play, aiming to close out before 2 AM tomorrow.
Tomorrow, the FOMC meeting is on the horizon, bringing a lot of uncertainty.
Therefore, institutions are widely using a Collar strategy for hedging, holding spot while buying out-of-the-money put options, and then selling out-of-the-money call options to cover the hedging costs with the premiums received.
Typically, buying puts means VIX goes up. Buying calls means VIX goes down.
However, due to the massive hedging activities from institutions, volatility is being suppressed.
But the more institutions hedge, the greater the uncertainty in the market, so leading up to the meeting tomorrow, there's a high probability of a short-term market movement.
Time to set up a position.