If you’ve heard that “August is sleepy,” you’re only getting half the story. While the summer months do run a touch quieter than the full year, August is where volatility often wakes up.
The data in one glance
- VIX tends to rise in August — by ~8–10% on average since 1990, per Cboe/S&P Global Research and multiple seasonality studies. That’s one of the largest average increases of any month. Cboe Global MarketsStoneXPepperstone
- Summer as a whole (June–Aug) shows slightly lower realized vol and VIX than the long‑term average—but August is the month where the pickup begins; May–July are typically the quietest. Gateway Investment AdvisersCBOE
- Recent history backs it up: from the 2011 US downgrade to the 2015 China devaluation and the record pre‑market VIX spike on Aug 5, 2024, August has a knack for jolts. Bank for International Settlements
Why August behaves this way
Lower vacation liquidity meets macro catalysts (late‑cycle earnings, Jackson Hole policy signals) and headline sensitivity. Thin books can amplify gaps and VIX jumps—even if the broader “summer” is calmer. Federal Reserve Bank of Kansas City
Double calendars: friend or foe?
- Friend: They’re vega‑positive, so IV expansion (the August tendency) helps your debit recover faster and can lift mark‑to‑market. tastytrade
- Foe: They’re range‑dependent. When SPX stays near your shorts, you collect theta and win. When SPX runs, gamma hurts, and vega tailwinds may not save you. luckbox magazine
Net: August is a “higher payoff, higher risk” month for double calendars. You’re more likely to get the IV lift you want, but also more likely to face a move that pushes you out of the tent.
How to trade it (checklist)
- Strike placement: Start a touch wider than your July templates; let your tent cover August’s fatter realized ranges.
- Event‑aware sizing: Into Jackson Hole week or key data, halve size or widen further. Federal Reserve Bank of Kansas City
- Term‑structure tripwire: If VIX/VXV ≥ 1, treat it as “risk‑off”—consider smaller calendars or temporary iron butterflies until contango returns. FREDOptions Hawk
- Faster profit‑taking: Harvest near your target sooner; August’s back‑and‑forth can snatch open profits. luckbox magazine
- Hedge the tails: Small long‑vol overlays (e.g., cheap VIX calls when curve flattens) or micro‑futures for delta trims. Track spot VIX (VIXCLS) and 3‑mo VXV (VXVCLS) on FRED. FRED+1
Bottom line
August isn’t “low vol.” It’s the month where volatility often pivots higher from summer lulls. For SPX double calendars, that’s good for vega but bad for runaway price. Trade the month with wider tents, quicker exits, and a term‑structure dashboard—and you can turn August’s squalls into an edge rather than a hazard.
⚠️ Disclaimer: This is my personal trading journal, shared for educational purposes only. Nothing here is financial advice or a recommendation to buy, sell, or trade. Please do your own research and understand the risks before making any trading decisions.