NaughtyPines

AS WITH ALL THINGS, THE BEST VIX PLAY INVOLVES PATIENCE

INDEX:VIX   CBOE Volatility Index
As you can see by the chart below, VIX             sub-12 doesn't happen very often, and while I know that folks like to play the VIX             in the +12 to infinity no man's land (myself, on occasion, included, see post below), I think the better bet is to wait for sub-12 VIX             and then play this index via debit spread (e.g., 10/11.5, 10/12, 10.5/12 call spread) where you know your risk up front, taking between 25% and 50% max profit when that occurs and then running since VIX             can rapidly cave, leaving you to hold the bag ... .

Point in fact, I don't trade the VIX             or VIX-related products as a general matter, since the vast majority of my positions are already "hedged" with a short call side matched with an oppositional short put side. Moreover, as a premium seller, I am already trading or selling volatility .

What VIX             and long VIX-related products were originally designed to do was to hedge long equity positions in the event of a market downturn, but they have morphed into an instrument that traders are attracted to due to the price swings these products experience over short time frames ... . The reason why I primarily look at VIX             on a daily basis is as an indicator of broader market volatility and, as such, as a sign of whether to enter a premium selling play in a broader market index or index ETF , such as SPX             , RUT, SPY             , IWM             , etc. rather than as a possible options play in itself. But, then again, if I'm going to be watching the thing on a daily basis anyways, why not try to get a trade out of it ... .
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