Hi guys how do you see long vix futures vx with short the vxx Does this help with drawdown? Any ideas welcome
That image doesn't show which futures contracts are being used. If they're near the back of the term structure (3 months or more from expiration), then the answer is probably yes. Keep in mind that front-month futures and longer-dated futures don't have to move in lockstep, so the spread can easily move against you. The trade does NOT have defined risk. This is especially the case if you don't have a good idea of how volatile the two contracts are relative to each other, as you can easily be net long or short VIX if you're not careful. If all this doesn't sound a bit scary (and it should), trading calendar spreads on normal stocks might be a better idea. You have defined risk, and both the long and short side of the spread are priced based on the same underlying stock.