Hi
I am new to trading. I am interested in buying the vix. It's now around 17-18, and with election time both in the us and Europe, I am sure that volatility will spike because of uncertainty. Is there any reason, why I should not buy the vix now and wait for th spike in the next six months. Also, the vix seems to trade at recent lows. Please give me your opinion!
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Buy the vix?
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If you do, I'd stray from TVIX (check the huge thread on it).
I'd prefer an inverse ETF rather than playing VIX personally.
VIX could do down on a down day which can be frustrating.
And a down market is where I see us going near term.
goodluck.
I'd prefer an inverse ETF rather than playing VIX personally.
VIX could do down on a down day which can be frustrating.
And a down market is where I see us going near term.
goodluck.
The VIX is a big boy game. Bigger than me.
The Actual VIX is not a tradeable instrument. You have to play it with options or ETF's. The options are expensive and the ETF's have their own issues.
The way I play the VIX is by the selection of option strategies on other underlying stocks/indexes.
For example, if I want to buy Volatility (VIX), I could do a calender spread on the SPY. This position will make money as the VIX raises.
If I want to sell Volatility, I could sell out of the money credit spreads on SPY. This type of trade benefits from falling Volatility.
I'm not saying "don't" dabble in pure VIX trades. I'm just saying every time I tried, I was the bug, not the windshield.
The Actual VIX is not a tradeable instrument. You have to play it with options or ETF's. The options are expensive and the ETF's have their own issues.
The way I play the VIX is by the selection of option strategies on other underlying stocks/indexes.
For example, if I want to buy Volatility (VIX), I could do a calender spread on the SPY. This position will make money as the VIX raises.
If I want to sell Volatility, I could sell out of the money credit spreads on SPY. This type of trade benefits from falling Volatility.
I'm not saying "don't" dabble in pure VIX trades. I'm just saying every time I tried, I was the bug, not the windshield.
I buy VXX etf call options on a close above 20 on the cash VIX.
It was the greatest trade of 2011
But i agree playing the VIX is a big boy game. The VIX is better used as a pricing instrument and a forecasting tool, than to speculate on. Institutions do all kinds of weird things with the VIX.
It was the greatest trade of 2011
But i agree playing the VIX is a big boy game. The VIX is better used as a pricing instrument and a forecasting tool, than to speculate on. Institutions do all kinds of weird things with the VIX.
If you're buying VIX options, keep in mind that futures several months out are trading at a slight premium. Therefore, a September call option will be less responsive to a one-day spike in the VIX. That means if you want to go long with calls, it makes more sense to go front-month. Of course, this means you have to time the move more precisely than with other options. If you're strictly going long to hedge your long positions against a major correction, then later expiration dates might be permissible.
Thanks for your help!! Up and out at +10% over the past few days
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