What are "buying VIX" and "variance swap"?

A

a529612

Any idea what they are talking about? Is buying VIX = buying put?

"Correspondingly, our Global Investment Strategy service recommends staying invested in the S&P 500 and simultaneously buying the VIX (potentially through variance swaps which are more liquid). Currently, the VIX index is very cheap, providing an affordable way for investors to hedge risks on long positions."

http://www.bankcreditanalyst.com/
 
Quote from a529612:

Any idea what they are talking about? Is buying VIX = buying put?

"Correspondingly, our Global Investment Strategy service recommends staying invested in the S&P 500 and simultaneously buying the VIX (potentially through variance swaps which are more liquid). Currently, the VIX index is very cheap, providing an affordable way for investors to hedge risks on long positions."

http://www.bankcreditanalyst.com/
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It says right there that VIX is currenlty very cheap. So they mean buying VIX calls, but they advise buying it thru variance swaps rather than options. Google "variance swap" for definition.
 
Quote from a529612:

Why would you buy more VIX calls when you are long S&P already?
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Generally, when the market goes down the VIX goes up...
 
Does IB offer variance swap?

Quote from MTE:

It says right there that VIX is currenlty very cheap. So they mean buying VIX calls, but they advise buying it thru variance swaps rather than options. Google "variance swap" for definition.
More...
 
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