Trading VIX as a CoveredCall possible? :-)

Discussion in 'Options' started by earth_imperator, Aug 9, 2022.

  1. destriero

    destriero


    Dump Truck! Short the f*cking put!

    Jeez, there is no juice in the vol 3 handles under the market... imagine that you f*ck trash.
     
    #11     Aug 9, 2022
  2. destriero

    destriero


    I don't short VIX puts.

    Screenshot_20220809-105020_Gallery.jpg
     
    #12     Aug 9, 2022
  3. RE: collateral: This would not work? upload_2022-8-9_10-52-38.png
     
    #13     Aug 9, 2022
    earth_imperator likes this.
  4. I'm handicapped as follows: I've only a CashAcct. Many option combinations are not possible with a CashAcct (only "covered" trades are possible)... :-(
     
    #14     Aug 9, 2022
    stepandfetchit likes this.
  5. K.. Now I understand! Ouch! It seems that will severely handicap you in improving trading performance. -- Beware that covered calls on UVIX will blead you dry! Look at long term performance of UVXY (same as UVIX before 2018 but 1.5X leverage since). These products best used leaning short.
     
    Last edited: Aug 9, 2022
    #15     Aug 9, 2022
  6. destriero

    destriero

    Cash secured short puts are also available to peasants.
     
    #16     Aug 9, 2022
  7. Just for fun: if CoveredCall (ie. LongStock + ShortCall) were possible with VIX then the following trade would be a lucrative one, IMO:

    VIX DTE=162.45(2023-01-18-We) S=21.8900(2.82%) K=10.00 B=18.10 A=18.20 @BE=3.7453(-82.89%) @S0(PL=6.2547(167.00%) max=167.00% PLann=808.49% maxAnn=808.49%)

    If one can short-sell it for 18.15 or so.
    CostBasis = Spot - Premium = 21.89 - 18.15 = 3.74
    If at expiration the Spot is the same as now, then 167% profit can be made.

    Says my scanner... :)

    Here's also the P/L diagram: https://optioncreator.com/st2zjbl

    The following is 20-minutes or so delayed (old) data:
    VIX.png
     
    Last edited: Aug 9, 2022
    #17     Aug 9, 2022
  8. For newbies like me: I think there is a typo in the above sentence: DTIM should be DITM, and means "Deep In-The-Money", ie. a deep ITM option.
     
    #18     Aug 9, 2022
  9. IFF you were approximating a covered call, your underlying would be /VXF23 -- using the wrong underlying (next month) is overstating what would be possible by about $6 or so.
     
    #19     Aug 9, 2022
  10. FWIW: In case it may not be clear: VIX is the untradeable index, which is a computed value: see: "https://cdn.cboe.com/resources/futures/vixwhite.pdf". The tradeable options you are referencing actually relate to the /VX Futures (each expiration if from a unique /VX futures product). Note the expiration coincides with the expiration of the futures contracts!
     
    #20     Aug 9, 2022
    earth_imperator likes this.