maybe you should study the link
Profiting From trading 2 Markets that Move the INVERSE from one another .........
- Thread starter md2324
- Start date
And maybe you should stop trying to slap people down because you don't quite like the way they word their responses. You knew perfectly well what I meant (and I even provided a link for anyone who didn't), and I was asking an entirely valid and reasonable question.
Uhm... VIX futures?? VIX options??? There's your simple answer mate...
How do you trade the S&P 500 with SPX?
SPX futures i assume, the 250 underlying ones... but they are less liquid/less dollar-volume then ES.
I've never understood why people trade SPY...
SPX is the index same as vix. That's what the x stands for. I was just being nitpicky with the guy who said you can't trade VIX but you can trade SPX.
Well to be totally nitpicky... short name for S&P500-index is SPX, with futures traded on that are ES-futures (=mini, 50 underlying) and SPX-futures (=250 underlying).
VIX-index short name is VIX, with VIX-futures.
Let me quote your source:
"What's more, while VIX is most often talked about on a spot basis, none of the ETFs or ETNs out there represent spot VIX volatility. Instead, they are collections of futures on the VIX that only roughly approximate the performance of VIX."
If you feel the S&P index is going to drop you can short ES futures, short SPY, buy puts on ES, SPX, SPY etc. You have many products that track the index.
If you think VIX is going to drop and you short VX futures, the VIX can drop and VX can stay up. VIX options do not track the VIX, they track the relevant VX futures. There are numerous instances where VIX moves one way and VX does not move at all or VX futures rise when VIX drops. Also VX futures have multiple expiration that move in ways that have nothing to do with VIX.
VIX ETFs are based on the futures.
I am not trying to be rude but when I say something and you all jump on me with supposed facts that are 100% wrong, then I come back with an answer along the lines of how about you do some research instead of coming across like you know something when the facts easily prove you wrong.
VIX options track the underlying futures, not the VIX. VX futures are a curve that can move quite independently from VIX. SImply look at a VIX/VX chart and see why there is contango and backwardation.