Index Straddles Vs. VIX Call Options

[BenChi]

Index Straddles Vs. VIX Call Options

Can a more experienced options trader enlighten a relative newbie as to the differences between /advantages/disadvantages of trading these two methodologies in anticipation of a large move?

I have already checked out the materials on the CBOE website - and am looking for additional clarification.

My understanding thus far is that the VIX is still sensitive to directional movements in the underlying, as it has a strong inverse correlation to the S&P.

As always, any help is greatly appreciated.

Ben

 

[BenChi]

nope, that would not do...

i am looking for a delta neutral position - i am asking the question, how does the VIX isolate volatility if it has a strong inverse correlation to the S&P?

i am also asking, is an index straddle more delta neutral than a VIX call?

i want to speculate on pure volatility - without any influence of directional price movement - what is the best way to do that?

 

[uncleTom]

Quote from BenChi:

nope, that would not do...

i am looking for a delta neutral position - i am asking the question, how does the VIX isolate volatility if it has a strong inverse correlation to the S&P?

i am also asking, is an index straddle more delta neutral than a VIX call?

i want to speculate on pure volatility - without any influence of directional price movement - what is the best way to do that?

sorry about deleting my other post.

VIX is the volatility of the S&P. I'm not sure about delta-nuetrality..

You could buy pure VIX or VXN futures . . you would be long volatility.

 

[momoneythansens]

Have a look at the recent discussions on VIX options for a start:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=78688

There's more than meets the eye to this product. Read the VIX options specifications at the CBOE site. Know what you're trading.

MoMoney.