Your opinion about this 0DTE strategy from tastylive presented ?

Discussion in 'Trading' started by TrAndy2022, Jan 3, 2024.

  1. ondafringe

    ondafringe

    This thread got me to wondering whether you can use VVIX and VIX to project future ranges -- something I came across online indicates that it is possible. I tried and came up with the following for the upcoming 30 days, but need someone who actually does this to look over the math.

    Using yesterday’s (1/11) closing numbers:

    VVIX: 75.54
    VIX: 12.44
    SPX: 4780.23
    XSP: 478.02

    I believe both VVIX and VIX are annualized 30-day numbers, with VVIX being the “VIX” for VIX.

    If you de-annualize VVIX to the upcoming 30 day period (75.54 / √12), you get 21.81 as a +/- percent range for VIX.

    That would seem to indicate that, over the next 30 days, VIX is expected to range between 9.73 (12.44 * (1 – (21.81 / 100))) and 15.15 (12.44 * (1 + (21.81 / 100))).

    I think those projected range numbers are also annualized, but not certain. If so, we probably need to de-annualize the VIX range numbers, as well, which gives us 2.81 (9.73 / √12) and 4.37 (15.15 / √12) as a percent range for SPX/XSP.

    So over the upcoming 30 days, SPX is expected to range between 4646 (4780 * (1 – (2.81 / 100))) and 4989 (4780 * (1 + (4.37 / 100))) and XSP is expected to range between 464 and 499.

    Anyone know whether that is correct? If not correct, how would you go about working it out?
     
    Last edited: Jan 12, 2024
    #11     Jan 12, 2024