Best way to play VIX

You can just buy call calendars but do institutions even use M1 and M2 options for hedging?

I'm assuming your theory is the S&P will fall and cause the Vix to rise during your 6-12 month timeframe. If that's the case, it would probably make the most sense to buy longer dated S&P puts while the premium is depressed by the low Vix.

For once, I agree with Hussss. Unless you time VXX and VIXY almost perfectly, you're likely to lose even if your thesis is eventually right. Those instruments experience significant decay over time due to rolling into the next month's Vix futures each month.

delta 30 VIX calls expiring end of January

As everyone else has said, don't do it.

If you think that vol will increase and the VIX will you can but VXX. Buy SXXY is an inverse so buy it when you expect VIX to fall.

You can do this, I'm not.

I can explain the basis of my post above but I’m not comfortable telling you what to buy or when. Your real theory is that the SPY will fall over a 6-12 month period. The way the VIX operates is pretty complicated, and there’s no way you modeled an upside move in volatility if you’re asking the question you asked. So let’s start with that. You’re assuming the VIX will spike because you think the SPY will fall, but that’s not necessarily the case, especially if the drop in the SPY is slow and steady. And even if the VIX does rise, the VIX derivatives don’t always track the rise (as of 9:05 CST today, VIX is up about 2% and VIXY is down 0.96%). For these reasons, as well as the significant decay in VIX derivatives mentioned by a few people above, you should probably make the trade on the SPY instead of VIX derivatives. But the VIX could still factor into the trading decision.

You have 2 main choices to trade an expected drop in the SPY: shorting the SPY and buying put options on the SPY (there are more complex choices such as shorting long calls but you should probably stick to the basics). The level of the VIX can help you choose between these options. The VIX is effectively a measure of the relative prices of SPY futures options. Generally, a lower VIX means cheaper options and a higher VIX means more expensive options. Because the VIX is currently low, you would want to be buying premium based on your thesis, which is why SPY puts seems to make the most sense.

Disclaimer: I’m not saying your thesis is correct or incorrect or providing any trading advice.

GL

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Disclaimer: I’m not saying your thesis is correct or incorrect or providing any trading advice.

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Thanks for the breakdown. Your assumptions were correct as far as theory and lack of the level of analysis you mentioned on my part. Admitted amateur trader that knows enough to be dangerous. Trader used loosely, I do not trade frequently. At times I have feelings based on economic background, current events, and basic knowledge of finance and attempt to put my money where my thoughts are in non-dangerous amounts.