I currently use individual positions to hedge against systemic moves. Since I trade credit spreads, I'm only looking at maximum moves of about 1.5% - 2%. Anything beyond that is hedged by the long side of the spread. And even this is OK and keeps drawdowns manageable. The problem is, I'm leaving a lot of money on the table because of 5 positions, I need 2 to be bearish even if I'm bullish just to protect against systemic moves downwards (actually, also exposed to systemic moves up too because of the bearish positions--just a bit less). I'd like to tilt my positions a little bit more bullish, and pick up the difference with a hedge elsewhere. The VIX seems to be the magic instrument here, with a debit call spread (one ATM, and one ATM + 2 or 3). The problems I see with this strategy, first, it leaves a small gap for small systemic moves. Secondly, to make this economically viable, I need to project out about 1 month (which is actually why the VIX is preferable to the SPX / SPY). Does anyone have any experience with this? I just started a spreadsheet to analyze this, and the number of moving parts is manageable, if a bit unwieldy. I thought I'd try tapping some knowledge here before I really start crunching the numbers and working back with my specific strategy. I'm looking at about 12% of my portfolio per month to do this, and that's actually reasonable in light of the costs of hedging with positions. The upside seems to exist when I crunched the numbers in aggregate, and I've even looked back at a few losing weeks to compare notes. The short version is, most losing weeks would not have been but for the hedges losing, and the few that were losers because of systemic moves would have been a bit smaller. I haven't gone through and looked at what this would have cost on winning weeks. As it stands, it looks like there's a slight advantage to this if only because the VIX stays pretty constant while the market moves up (where as a SPX spread would cost money to roll if the market went up, or cost more to buy each week) Any pitfalls, insights, or anything obscure and not readily obvious about trying this strategy?