Shorting the VIX

[taowave]

I just posted in a another thread how Tudor Jones trades tops and bottoms...
Its naively assumed that he goes all in from the get go,but he has stated that after the 10th attempt,he finally gets it right..

Like everything else in life,it takes a special skill set,and PTJ is sincerely an exception as opposed to the norm

 

[Same Lazy Element]

tops and bottoms...

There is an old saying "picking bottoms gives you smelly fingers"

 

[zdreg]

There is an old saying "picking bottoms gives you smelly fingers"

Are you the author?

 

[taowave]

Probably the best advice I've gotten on this forum

There is an old saying "picking bottoms gives you smelly fingers"

 

[Atikon]

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?[/QUO

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.

Who cares? if you short it at 70 and you know it will revert back to at least 30 within a year or two, that is still a 50-100% return

 

[TheBigShort]

Who cares? if you short it at 70 and you know it will revert back to at least 30 within a year or two, that is still a 50-100% return

you have to be kidding me

 

[Atikon]

you have to be kidding me

Oh my bad was meant to take gurus comment but might as well show you, that you can trade the VIX via CFDs if you just go outside of the US juristiction. These are the Option I have trading via IG:



bilder kostenlos downloaden fürs handy

 

[TheBigShort]

The thing is, the vix product you are trading is not the cash price. If it was, many smart traders would have arbed the shit out of IG, causing IG to close the product. I was trying to figure out what the "cash" vix is that they have. Still not sure.

 

[TheBigShort]

It has a lower bound at 14.5 but does not look to have a roll down affect like the front month future during contango.

 

[Atikon]

The thing is, the vix product you are trading is not the cash price. If it was, many smart traders would have arbed the shit out of IG, causing IG to close the product. I was trying to figure out what the "cash" vix is that they have. Still not sure.

It's not like those spikes occur on the regular. Also there are limitations on when you can trade certain things. If there is to much slippage or voaltility you might not get filled. I think I was lucky bc ppl thought the Economy was going to colapse and VIX was expected to go higher (i.e. VOX in the 80s was at 160). Also you have both sides of the Coin with CFDs and 80% of ppl loose money with them. So they get compensated more than enough, one reason why the ESMA regulated CFD Broker