VIX-Trading. What is the best way to make money?

Hi! gg,

I think it's pretty to sale 3 contracts 'month +1' at 10, 11 and 12 when the price is fair. Then buy back with some benefit, And protect with a LEAP(s) or two Bought a the better cheap price possible when VIX are very high to protect the position. So! Two legs calendar spread initiated separatly.
 
Wayne Gibbous

I think we are always think that to get rich we need to start big. That is not the case. Its compounding and persistance.

I have started very small very often the last 20 years. Ive made mistakes which I will not repeat any more.

Key is clever money management and taking justified risk - I am ready to take big risk on the VIX, because I know that the markets cant stand still. Its impossible.

If markets stop I am willing to loose my bankroll. Everything!

Everything mean 100% on 2, 20, 200 or 2000 contracts.
 
gg12,
First these guys are just joking about selling at option at zero, no need to respond just laugh; I thought it was funny. Second, as I said no one thinks the VIX is going below 10 right now and that is why you can't sell the 10 level Puts. At this point, to get your 40 cents, you will need to sell the 12 strike as you did. You are the one who posted that 11 out of 32 times it expired below 12. I would think that you would consider an expiration of 10 unexpected right now, but you have to admit it is possible, and then you lose a net 1.60 on your 12 strike sale. Not a big deal but now you have to have 4 winning months just to make up the loss. I am not saying you should or shouldn't do anything, just giving you some things to consider. I am also not terribly impressed with the market makers in the VIX, the last time I tried to do 500 contracts at a reasonable price they moved the market on me.

Artes,
Be careful with calendar spreads in the VIX because your short front month Put may jump in value if the VIX falls several points right around expiration, but do to the way the VIX futures trade your long Put in one of the future months may not move at all and not provide the protection for which you hoped.
 
Quote from gg12:

VIX options cant be compared to index or stock options. There is a big difference. I bet that you and I know much more than some big players out there.
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Shhhhhhh!! They're listening.

Quote from gg12:

The very interesting thing is that we all can run strategies which were not possible sometimes ago due to the commission structure, but now retail traders come to a same level as the professionals.
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Incomplete knowledge is sometimes worse than no knowledge.

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Opt!

Thanks for advies, after reading I thing may be it's beter to buy a future VX when 'f. ex.' VIX is at 12.0x and to sell few ticks higher (30, 100 or 300 ticks higher) when the VIX raise (to 12.3, 13.0x or 15.0x...)

Did You agree with that?

The minimum margin to initiate the position is around $:4,500... and how much do You suggest to add money to protect the account ? $:3,000 more money is enough?? so 7/8,000$ free cash into the account to protect VIX downside ...
 
Quote from artes:

Opt!

Thanks for advies, after reading I thing may be it's beter to buy a future VX when 'f. ex.' VIX is at 12.0x and to sell few ticks higher (30, 100 or 300 ticks higher) when the VIX raise (to 12.3, 13.0x or 15.0x...)

Did You agree with that?

The minimum margin to initiate the position is around $:4,500... and how much do You suggest to add money to protect the account ? $:3,000 more money is enough?? so 7/8,000$ free cash into the account to protect VIX downside ...
More...
Artes,
I am not sure what you are saying. Are you talking about selling Calls or Puts, which months? The money you should have for selling Puts should be enough to handle a move down to 10 at this point, and the money needed to sell Calls, well, the only thing I will say is don't sell naked Calls on the VIX.
As I said, calendar spreads do not work in the VIX options like you would think. Each month is based on different VIX futures contracts. Each different month in the options is almost like trading different stocks.
 
artes

I would just keep it simple.

When you start to hedge you are not sure about your position and should get out. You also should only take hedging vehicles into consideration which you 100% understand and can manage.

opt789 also pointed into the direction that trading various strikes in different expiration monthes in the VIX arena is like trading different instruments.

In this market there are a lot of specifics. And there is a big requirement to learn. Only invest money if you are willing to invest a lot of time to acquire the needed knowledge.

To participate in the VIX market only a fraction of your money should be used at the beginning. Thats the reason why I only use 2 contracts. I have no problem loosing that payroll, but it helps me to attach some emotions to it, because its now real money. In paper trading its hard to get really involved.

In terms of commission I have the same relative commission for selling 2, 20 or 200 contracts. There should be enough margin in your account to hold a short put until expiration. Margin calls and liquidations are a very bad thing, because they show that there is no control of the trader anymore and the broker has to step in.
 
LeonPhelps

Incomplete knowledge can be completed.
No knowledge is dangerous and wipes out accounts.

Do you already have all the knowledge?

For my side I don't need to have the perfect knowledge. I enjoy the process of learning. I also enjoy the process of communicating and sharing. I am aware that I will have opportunity costs for missing pieces of information. But thats ok for me.
 
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from opt789
Artes,
I am not sure what you are saying. Are you talking about
selling Calls or Puts, which months? The money you should
have for .....
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Opt!

I mean to use a long Future contract, f.ex: bought when the VIX is low, near 12/12.5 an sell it few ten ticks higher. (30, 100 or 300 ticks higher)

To initiate the position is around $:4,500 still stay (margin requirement) into the account.

----------------
Product Specifications
CBOE Volatility Index (VIX) Futures

CONTRACT NAME:
CBOE Volatility Index (VIX) Futures

LISTING DATE:
March 26, 2004

DESCRIPTION:
The CBOE Volatility Index is based on real-time prices of options on the S&P 500 Index, listed on the Chicago Board Options Exchange (Symbol: SPX), and is designed to reflect investors' consensus view of future (30-day) expected stock market volatility.

CONTRACT SIZE:
$1000 times the VIX

CONTRACT MONTHS:
The Exchange may list for trading up to six near-term serial months and five months on the February quarterly cycle for the VIX futures contract.

TRADING HOURS:
8:30 a.m. - 3:15 p.m. Central Time (Chicago Time)

TRADING PLATFORM:
CBOEdirect
----------------
source : http://cfe.cboe.com/Products/Spec_VIX.aspx
 
May calls (Buy) seems Like a good idea
May and June
Starting from when Vix <= 11
Should be a slow gain Though
Strike 10 Looks great
 
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