I bought VIX DEC24 options right after the Yen carry trade fiasco. I have a hunch that we're in for more crazy and violent swings. As you can see in a historical chart VIX doesn't stay high for long and quickly subsides.
So I opened a market sell order w the conditional to send only after VIX is greater than or equal to 45. I picked 45 bc on 8/5 it opened at 55.68 and dropped to 43.75 in an hr. So ideally I'm getting a sell order in right at market order. I wish I could do a quote trigger with a limit order but if the limit is too high then you miss the whole enchilada.
The goal is to capture downside protection and get the most value, without being greedy, meaning I don't need to sell at the peak, profit is profit.
Does this make sense? Anyone else play VIX? I'm curious what your strategy is. Can discuss other hedging strategies too.
Posted by WhiskeyNeat123
1 Comment
VIX option underlying is VIX 1 year futures, so the spot price spikes will have very little affects on your long dated calls. The options will most likely lose value due to theta and won’t appreciate much if the forward price doesn’t move much during the spike then crash.
I think trimming is a superior risk reduction than holding a long dated VIX calls.