Comments on: How to Profit From Volatility Through One Simple Investment

By: aashiqm

aashiqm — Sat, 15 May 2010 22:57:01 +0000

Gary,
Karim is right. See my reply to SaraT.

By: aashiqm

aashiqm — Sat, 15 May 2010 22:56:05 +0000

SaraT,
When market goes down, VIX goes up and you should buy “calls” on VIX! Same way, when market goes up VIX is going down and so you would buy “puts”

By: gary lea

gary lea — Wed, 20 Jan 2010 20:20:10 +0000

Sara T., you are exactly on point. Karim has it wrong if you want to profit from options.

By: Sara T.

Sara T. — Wed, 20 Jan 2010 03:45:33 +0000

~ When the VIX rises, it indicates that the market is usually going down – hence you’d buy call options.

~ When the VIX falls, it indicates that the market is going to rise – so you’d buy puts.

Am I missing something here? Or did you mean “sell calls” and “sell puts” respectively?

By: Camille Pennelle

Camille Pennelle — Wed, 20 Jan 2010 03:30:47 +0000

Thank you for your calming matter.I should know by now you have a eye on it. I sometimes need a little bit of common sense.

By: Chris

Chris — Wed, 20 Jan 2010 02:52:53 +0000

The VIX isn’t causal – “When the VIX falls, it indicates that the market is going to rise – so you’d buy puts.” – The market rises, so the VIX falls (due to lower implied volatility and the skew of the SPX options).
Second, you are usually best off using front month VIX options – “you have to buy a couple of months ahead,”
And the VXX is based off the futures – just like the options – and it has serious issues of the futures premium and the futures roll.

By: gunther

gunther — Wed, 20 Jan 2010 01:57:55 +0000

Would we get the same protection as VXX offers by going long on SH ?

By: mel williams

mel williams — Wed, 20 Jan 2010 00:04:09 +0000

I READ ANOTHER ARTICLE ABOUT THE VIX, AND IT SAID
VIX 10–15 SELL
VIX OVER 40 BUY
VIX OVER 50 BUY MORE
VIX 60–70 TAKE OUT A SECOND MTGE

SO IF THE VIX GOES BELOW 15 SHOULD I SELL MY STOCKS. I DO NOT DEAL IN OPTIONS

By: Paul Livingston

Paul Livingston — Tue, 19 Jan 2010 21:08:15 +0000

Shouldn’t these two comments be reversed or at least add “buy long term”?

~ When the VIX rises, it indicates that the market is usually going down – hence you’d buy call options.

~ When the VIX falls, it indicates that the market is going to rise – so you’d buy puts.

By: Jim Gentile

Jim Gentile — Tue, 19 Jan 2010 20:28:58 +0000

Why would you build positions at lower prices in a chart that basically looks like a ski slope, straight down. Every time it pops up to it’s 50 day moving average it sells off again. Good luck with that stragety. Eventually we will get a good correction and you will get a bounce in the etn, but as someone said “the market can stay irrational longer than one can stay solvent”