Gotcha! I didn't seriously think anyone would be shorting anything vix related here whether it was futures or an etf, but ya never know. It could have also been hypothetical to pair it with some kind of long position as I didn't know what your real intentions were. As for vxx, each time someone thinks it wont go lower, it does. There's mathematical and fundamental reasons as to why the 3 year curve is essentially inversed exponentially. Taking a stab here is really a gamble. I'd be more inclined to buy a bunch of debit spreads, maybe some reverse condors to capture either move, because we're going to see some vol spikes here soon, especially heading into the fall. It's far easier to bet on vol coming back into the markets than it is to bet on a side.
Forget about it, too much contango. The contango definitely favors the short seller, just look at VXX vs XIV. Because of it, VXX has limited upside, whilst XIV has unlimited upside. This contango is reflected in futures. No serious trader messes with VIX or any of the ETFs in trading vola. Go to options.
Exactly. I'd try to steer clear of anything that 'tracks' the vix and just look to buy volatility via spreads, maybe long naked options if you want to lay out a bit more in premium. I put a few spy dec ATM condors on in paper to see how they react to any vol spikes, but I'm not necessarily ready to put any real money to action just yet. I think there's some grinding here and then a capitulation breakout which would crush your spreads even further if all you're trying to do is capitalize on vol.
Well, not exactly a capitulation breakout, but 4 year highs on the spy. Vix holding its own right here for the moment. There's nobody to take the opposing side right now, which should be a red flag...still seems a bit early with the summer coming to an end and a holiday weekend approaching. Ideally we will keep marching higher herIlona low volume til around that period in time (after holiday) when a majority of professionals come back to the markets and begin to reevaluate their holdings.