Index Straddles Vs. VIX Call Options

Discussion in 'Options' started by BenChi, Oct 24, 2006.

  1. BenChi


    Index Straddles Vs. VIX Call Options

    Can a more experienced options trader enlighten a relative newbie as to the differences between /advantages/disadvantages of trading these two methodologies in anticipation of a large move?

    I have already checked out the materials on the CBOE website - and am looking for additional clarification.

    My understanding thus far is that the VIX is still sensitive to directional movements in the underlying, as it has a strong inverse correlation to the S&P.

    As always, any help is greatly appreciated.

  2. BenChi


    nope, that would not do...

    i am looking for a delta neutral position - i am asking the question, how does the VIX isolate volatility if it has a strong inverse correlation to the S&P?

    i am also asking, is an index straddle more delta neutral than a VIX call?

    i want to speculate on pure volatility - without any influence of directional price movement - what is the best way to do that?
  3. sorry about deleting my other post.

    VIX is the volatility of the S&P. I'm not sure about delta-nuetrality..

    You could buy pure VIX or VXN futures . . you would be long volatility.