Taking advantage of this low vol?

[REI_Chris]

I think if I were to do anything right now it'd be longer dated straddles. If we breakout north we will see more people enter the market, shorts covering, and a possible gravitation to that all time spy high, in which case you're likely to make your money back on just the long call side alone while being able to ride the puts for free.

If we fail here, you'll see a spike in vol come back and an overall increase in your entire position in general. How far that pullback would be is unknown, but you're likely to make your money back on just the put side from the vol spike coupled with the decrease in its underlying.

Regardless, it takes the guessing work out because while I do believe we will breakout from here higher, we are in those hazy summer days still, low volume, etc, with an increasingly low vix that should scare the shit out of most long-only traders.

If you're worried about theta, leave yourself a mental stop predetermined by a period of time you're willing to allow for things to heat up. We still have a few weeks left, so as tempting as it is buying now still might be too early, but it's never a bad idea to start thinking about how to profit off this low vol.

 

[hedgeman]

Try setting up and testing a time ratio spread, maybe.

 

[7out]

Might be a stupid and unrelated question, but hope someone can find it in their heart to help.

can I short the VIX or something that emulates it in futures, or ETF's (stock index) ?

thanks in advance for responses.

 

[Georgi90]

Quote from failed_trad3r:

SELL SELL SELL black swan imminent

this time could be a positive black swan with the vix going some points up, doesn't matter, the iv curve will smile at you

 

[Georgi90]

Quote from 7out:

Might be a stupid and unrelated question, but hope someone can find it in their heart to help.

can I short the VIX or something that emulates it in futures, or ETF's (stock index) ?

thanks in advance for responses.

you can short vix futures, the front month may be

 

[Georgi90]

Quote from Georgi90:

you can short vix futures, the front month may be

vxx is etn consisting of short term futures, september and october now
and vxz is medium term with more futures in the weighing

 

[REI_Chris]

Quote from 7out:

Might be a stupid and unrelated question, but hope someone can find it in their heart to help.

can I short the VIX or something that emulates it in futures, or ETF's (stock index) ?

thanks in advance for responses.

Whether you can or not is somewhat irrelevant if you're not hedged or have a damn good reason why you'd be playing with fire like that. I'm not sure about the kind of margin you would need, but I imagine it wouldn't be cheap. Shorting the vix, at these levels, is asking for disaster. Again, I don't know your true plans so maybe you're not doing it outright, but I can think of a thousand far more profitable and safer things to trade with a similar payoff that would allow you to sleep at night!

 

[Georgi90]

Quote from REI_Chris:

Whether you can or not is somewhat irrelevant if you're not hedged or have a damn good reason why you'd be playing with fire like that. I'm not sure about the kind of margin you would need, but I imagine it wouldn't be cheap. Shorting the vix, at these levels, is asking for disaster. Again, I don't know your true plans so maybe you're not doing it outright, but I can think of a thousand far more profitable and safer things to trade with a similar payoff that would allow you to sleep at night!

you said absolutely nothing...

 

[REI_Chris]

Quote from Georgi90:

you said absolutely nothing...

If I have to tell you in bold print that setting your net worth on fire is relatively a better idea than shorting the vix then you probably shouldn't have replied.

Edit: reading through your old posts it seems as if you just want people to tell you what to trade.

 

[7out]

Thanks for your reply, but I asked metaphorically if I can short it.

I'm mostly a prop trader with the occassional longer term trade (for me longer term trade is longer than day trading, lol)

I simply came across this thread and started reading up on it, I assumed the VIX or (etf) VXX could only have a value from 0-99, but see that when the VXX was started it started at a $ value of $400 (which has since confused me).

One another note, no I was not considering selling the VXX at such a low level, but rather considering if I could profit from buying it for when volatility will return (and it surely will at some point).

Still new at understanding this, but also saw the VXX is simply at $11.20, and if I could hold $100k worth of shares until volatility returns, would my value not double or even triple within a 1 year time period.

Quote from REI_Chris:

Whether you can or not is somewhat irrelevant if you're not hedged or have a damn good reason why you'd be playing with fire like that. I'm not sure about the kind of margin you would need, but I imagine it wouldn't be cheap. Shorting the vix, at these levels, is asking for disaster. Again, I don't know your true plans so maybe you're not doing it outright, but I can think of a thousand far more profitable and safer things to trade with a similar payoff that would allow you to sleep at night!