VIX-Trading. What is the best way to make money?

Im doing at lot of things in parallel at the moment. My play on the VIX is that I have a short put position since some days.

Its following:

-2 Put 05/15 Strike 12

VIX future for May is currently at 13.65

Option traded last today at 0.40. Im in positive terrain since a couple of days.

Its a low maintainance play for me, because I dont have to follow very much.

 

You dont want to be short the convergence as we near cash unless you are betting on a higher vix.

 

sellvol

Yes Im thinking of a sideways to up-movement in the Vix-Future while holding the position.

Vix closed at 13.02
May futures closed at 13.22
Put strike is 1.22 points or 10.1% below future price.

VIXQN
2007-05-16 option expiration
VIX MAY07
12 P
-2 * $0.416736 * 100 = $-83.35

I will keep the $83 if the future will settle above the strike.

 

There is a price , like stocks options
http://finance.yahoo.com/q/op?s=VIX-X.W&m=2007-05
and
some InteractiveBrokers informations there : http://www.interactivebrokers.com/en/general/education/priorWebinars.php?ib_entity=llc (webinars)

 

artes

Thank you!

Ive just watched the presentation of Kevin Baldwin from the Institute for Financial Markets; execellent education

https://interactivebrokers.webex.co...nfViewID=300707785&siteurl=interactivebrokers

For Yahoo there is a straddle view available

http://finance.yahoo.com/q/os?s=VIX-X.W&k=12.00

Basically I am trading a 'half" short strangle on VIX options (only the short put leg).

 

The put option has settled at 0.3587 on Friday.

 

04/24/07 $-83.35
04/27/07 -71.75

Unrealized gain $11.60 in 3 days.
Thats 13.9% on 83.35 or
2.3% on the margin of ca. $500

 

Ive made a quick simulation, if I write every month a put for a premuim of 20% I would get to a bankroll of

2150 at the end of this year
19,000 at the end of next year

That the compounding power (no loss assumed in that period)

Can the VIX stay above 12.0 for the next 1 1/2 year?

 

Is the VIX better to be forecasted than the SPX?

See attached the VIX and its historical and implied vola.

 

VIX Levels over passed weeks (about 3-4 years).

The level of 12 is crossed to the downside many times. A better level would be 10.
What would be a realistic premium?

There are some specialities with VIX options.
Good source for VIX options education:

http://www.cboe.com/micro/vix/vixoptions.aspx