how do you see keep buy call the vix when its below 10
what do you think about it
what do you think about it
buy call vix when volatility sink
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Buy below 10 sell above 30. You might be on to something!!!
On a serious note, you can not buy the vix out right.There is so much on this topic that I am not about to write any of it here. Google "How to buy vix" that should send you down the rabbit hole.
On a serious note, you can not buy the vix out right.There is so much on this topic that I am not about to write any of it here. Google "How to buy vix" that should send you down the rabbit hole.
VIX calls are tied to the price of the corresponding futures contracts rather than to spot VIX, so you have to determine whether you have any edge in buying the calls (1) based on the expiration of the futures/VIX options contract you choose, (2) based on the level that future is trading at, and (3) the implied volatility of the VIX options themselves.
I recall Bill Luby saying that trading these instruments is like trading a derivative of a derivative of a derivative of a derivative of a derivative of a derivative. I think he was talking about VXX and UVXY options, but the same sentiment applies here. VIX options are complicated.
I recall Bill Luby saying that trading these instruments is like trading a derivative of a derivative of a derivative of a derivative of a derivative of a derivative. I think he was talking about VXX and UVXY options, but the same sentiment applies here. VIX options are complicated.
so if i want only take the long side of the vix is it better to trade the vix by the vx futures contract , even after all cost it has good reward if the vx end up near 30
it would takes time for VIX to go from 10 to 30, normally..
by the time it arrives to 30, you might have a little reward
"after all the cost" you surely want to reconsider this approach..
unless of course, you can time the market and know your target vol
that would be a different story..
so you need to work on 2 things: method and tools
on technical level, you can use VIX or SPX options
by which you can reshape the risk/reward to your own preferences..
until then :]
I have not tried this, but an interesting study would be,
"if the VIX pops above 20, how often does it then pop, also, above...
22?
24?
26?
Thus, a Buy order set at 20, with an immediate Sell at 22 or 24 or 26....
how much would each of those set-up have made/lost, over the last 12 years?
Again, I haven't tried it, nor tested [even by eyeballing data, which I'm tempted now to do...]......
But this seems like something worth a cup of coffee and some screen-staring time...
"if the VIX pops above 20, how often does it then pop, also, above...
22?
24?
26?
Thus, a Buy order set at 20, with an immediate Sell at 22 or 24 or 26....
how much would each of those set-up have made/lost, over the last 12 years?
Again, I haven't tried it, nor tested [even by eyeballing data, which I'm tempted now to do...]......
But this seems like something worth a cup of coffee and some screen-staring time...
A lot has been published on what happens to the short vol trade when VIX is low. For example, take a look at this paper from AQR:
Still Not Cheap: Portfolio Protection in Calm Markets
https://images.aqr.com/-/media/AQR/Documents/Journal-Articles/JPM-Still-Not-Cheap.pdf
The takeaway is that shorting volatility has historically been profitable regardless of the level of VIX, but the risks are larger when VIX is high, as options are more likely to suffer massive losses. On the other hand, when VIX is low, options tend to have smaller premia, and traders who leverage up to increase returns are also increasing their exposure to VIX spikes.
Generally speaking, shorting volatility works well when VIX is low; you can see this in the large difference between the level of the October VIX future and the level of cash VIX. VIX is down 2.4% today, and the future is down 2%, so VXX had a gap move down, but the difference between cash VIX and the future has only gotten larger.
There are ways to buy volatility effectively, but you have to be very picky about what instruments you use and when you use them.
Still Not Cheap: Portfolio Protection in Calm Markets
https://images.aqr.com/-/media/AQR/Documents/Journal-Articles/JPM-Still-Not-Cheap.pdf
The takeaway is that shorting volatility has historically been profitable regardless of the level of VIX, but the risks are larger when VIX is high, as options are more likely to suffer massive losses. On the other hand, when VIX is low, options tend to have smaller premia, and traders who leverage up to increase returns are also increasing their exposure to VIX spikes.
Generally speaking, shorting volatility works well when VIX is low; you can see this in the large difference between the level of the October VIX future and the level of cash VIX. VIX is down 2.4% today, and the future is down 2%, so VXX had a gap move down, but the difference between cash VIX and the future has only gotten larger.
There are ways to buy volatility effectively, but you have to be very picky about what instruments you use and when you use them.
i've seen the trader buy a vix with options for a 50 cents how about them how they do that