A little off topic , treasuries ( someome said it here at ET ) are a decent proxy for Volatility. Look at the gretaer than 10% price increase in the 20+ year bond for 2014. VIX flat, yet signs of momo stock risk off defensive rotation is reflected in bonds . Why not view bonds as a proxy for volatility instead of fed rate policy, and at 100x leverage for ZB or 3x for TBF there is plenty of action. Hell 10% in the 1st 4 months unlevered.
The VIX is fine. They still are a good indicator of volatility because those guys that end up moving markets and causing these volatility, often put trades out in options too which affects the VIX. Be careful with these new trends such as using bond rates, etc. There isn't too much magical fairy dust happening. There simply isn't a lot of volatility expected, and people are buying momo stocks during whatever risk on/risk off day. They are independent events and most momo stocks are not on the S&P 500 either, which is where the VIX is derived from. Furthermore, the bond markets are distored by QE, lots of recent short covering and according to the permabears, the credit worthiness of the government also. These things come and go. A trend works for a while and then stops. The advantage of those quant funds is they have infrastructure in place to predict inflection point of these trends and stop trading on it, otherwise you lose money. If you can't see the inflection point and you keep trading it once the trend stops working (e.g. shorting gold and buying stocks in 2014 and beyond), you might end up being the only bagholder still trading a certain setup when things have turned. I'd probably just keep it simple.
SVXY has much lower liquidity and a mile wide bid-ask spreads for options. Also, it doesn't go up as much as VXX goes down, so limited-risk option positions are almost fatally disadvantaged. UVXY can spike up uncontrollably during VIX spikes, and there is really no such thing as limited risk position with UVXY that has any reasonable profit potential. Life just got harder; that's all. The only thing this ruling did is eliminate thoughtful and informed traders as competition to the "professionals".
Here is an example from the OCC calculator. I entered buying 1000 VXX. The NAV is $33,780 and the PM requirement is $5067. That is 15%. 1245