Shorting the VIX

You can't short spot VIX. You can only short the futures. When VIX is high, the futures price some type of mean reversion. You can't short SPX options or var swaps because realized vol is usually outpacing implied at those levels.

Every time you think of something where the situation is "how can I lose", you are almost certainly missing something. Remember this is a market, so if you are always going to win, who is going to fill you?
 
TheBigShort said:
You can't short spot VIX. You can only short the futures. When VIX is high, the futures price some type of mean reversion. You can't short SPX options or var swaps because realized vol is usually outpacing implied at those levels.

Every time you think of something where the situation is "how can I lose", you are almost certainly missing something. Remember this is a market, so if you are always going to win, who is going to fill you?
More...


well I can because I am in the UK and we have something called spread betting.

So they let you short or go long the spot/cash VIX. See link below ....

https://gyazo.com/f38be0cbcb6cb6d19c2c3969d321d806

are you saying you can go long the VIX or short it, but when it spikes there is no volume to get out of your position?

ty
 
tradingpoker said:
so without losing to margin how do you lose when shorting the VIX after it spikes?

ty
More...


How can you know whether you’re near the top of the spike? Most of the time VIX goes up by small % like 10%-30% and if you wait longer then you’ll miss most of the spikes during most of the years and will see them only in hindsight. But if you short too quickly then it may continue going up, say by 500% and wipe you out.
And it’s not just the margin, you can actually lose 5-20 more than you’re betting, depending on which instruments you use to short it.
One of my top strategies is actually going long TVIX. Shorting is easier until it doesn’t work.
 
guru said:
How can you know whether you’re near the top of the spike? Most of the time VIX goes up by small % like 10%-30% and if you wait longer then you’ll miss most of the spikes during most of the years and will see them only in hindsight. But if you short too quickly then it may continue going up, say by 500% and wipe you out.
And it’s not just the margin, you can actually lose 5-20 more than you’re betting, depending on which instruments you use to short it.
One of my top strategies is actually going long TVIX. Shorting is easier until it doesn’t work.
More...


in the last 30 years every time the VIX has got to the 50 area it has gone back down pretty much soon after. See my chart in my op.

just before 2009 is spiked to just under 100, but within weeks back under 20, which it is in the process of doing now. Any time it is in the 50 area it seems you can short it knowing not IF it's going to come down, only WHEN it will come down. Every time it has spiked in the last 30 years it has always come back down within weeks.

When has it ever spiked and stayed high?
 
Can you link me to the website? If this is true, you could do a lot more exciting things than just betting on spot direction. I find this hard to believe
 
on a side note, every time it has gone into the 10-20 range it seems like a long position will always make you money at some point.

as it does not really go under 10 and as long as you hold your long position it's a matter of time before it spikes up.

Again what am I missing here?

ty
 
tradingpoker said:
on a side note, every time it has gone into the 10-20 range it seems like a long position will always make you money at some point.

as it does not really go under 10 and as long as you hold your long position it's a matter of time before it spikes up.

Again what am I missing here?

ty
More...

You missed it. That is what you are missing. Last I saw it was around 45? So where does it go from here? Up 30 points or down 30 points? Hell of a time to get into the thing.
 
You must log in or register to reply here.
Back
Top