Selling VIX puts

[destriero]

Yeah, selling VIX puts is pure champion shit. rallymode made like $8MM trading VIX switches in three years from a few hundred K. He would shit himself with laughter over shorting pennies in VIX puts. It's a two figure IQ move.

Imagine holding a twenty cent put for a month.

 

[destriero]

https://twitter.com/x/status/1402706565522759689

HTF is that a hedge?

 

[destriero]

Fwiw I think VIX is due for an upside move soon, I'm long UVXY and will scale up if mkt sells after tomorrow morning 8:30 cpi numbers out.

Long volatility here

Bro, I'll let you in on this incredible swing. Sell the 30d 16P at 0.2 net. VIX rallies a buck on CPI and you make three cents.

 

[newwurldmn]

The 16P is a 1.7% return on margin for a 27d hold.

And it’s very possible vix is 15 by then.

 

[Girija]

I am wondering what is wrong with selling VIX puts when VIX is at some super low level(ie. historically close to 10). It's very hard for it to go lower and in worst case we will get to pay our strike price(x100) on expiration. I know the premium is trash but assuming we would re-buy the option(close) at smallest VIX spike it's still going to generate some profit. Just what could go wrong? Poor liquidity of short term VIX puts preventing us from closing position to secure premium? Commissions?

If you don't have an edge with vix you are far better staying away from it. Super low is a subjective reference and it is not an edge. To make money on dimes you will eventually increase your trade size and then you could blow up the account spectacularly. The options are on futures. It has a forward looking piece to it.

 

[El OchoCinco]

Well, he was posting quite a lot of good VIX trades in real-time, including before placing them and while in the trade(s), somewhat like you did sometimes
He also offered access to fully audit his account.

View attachment 260563

These are mostly calls... if he is selling short calls then he will blow out pretty soon and the fabricated 8000% return will mean he will lose his entire portfolio.

 

[guru]

These are mostly calls... if he is selling short calls then he will blow out pretty soon and the fabricated 8000% return will mean he will lose his entire portfolio.

No, he was mainly selling puts, while only occasionally calls. I just grabbed one sample screenshot I could quickly pull out of his Twitter. Sometimes he might've sold calls while also having sold puts, so ending up with short strangles. And all of that was mainly during high IV when both had high premium. I think he stopped in 2019, and focused on personal investments in biotech.

 

[paget]

Regarding the comments about low premiums when selling VIX puts, yes that is obvious. But thing is, the point of this trade could be simply to offset cost of buying VIX calls as hedge(ie. typical risk-reversal). Everybody knows that hedging cost money so I was only wondering on how to reduce the overall drag, not how to generate actual profits.

 

[newwurldmn]

Regarding the comments about low premiums when selling VIX puts, yes that is obvious. But thing is, the point of this trade could be simply to offset cost of buying VIX calls as hedge(ie. typical risk-reversal). Everybody knows that hedging cost money so I was only wondering on how to reduce the overall drag, not how to generate actual profits.

if the vix puts are cheap, why would you use it to offset another asset? Hedging a hedge is just adding a speculative position.