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If you were going to buy VIX calls as a hedge for a possible crash..
Posted on 8/26/22 at 12:30 pm
Posted on 8/26/22 at 12:30 pm
What would your target expiration be?
This post was edited on 8/26/22 at 3:21 pm
Posted on 8/26/22 at 1:05 pm to James11111
Why not: Just buy VIX ETNs when the VIX curve gets into backwardation?
But to answer your original question, when playing options just go out far enough to avoid time decay. If I played it that way, I would go out to 2023.
But to answer your original question, when playing options just go out far enough to avoid time decay. If I played it that way, I would go out to 2023.
Posted on 8/26/22 at 2:34 pm to Hussss
Sqqq
Avoid vxx like a plague.
Or just buy puts of companies that are tech and way high PE
Avoid vxx like a plague.
Or just buy puts of companies that are tech and way high PE
Posted on 8/26/22 at 2:38 pm to James11111
What is the goal of the trade?
Posted on 8/26/22 at 3:23 pm to wutangfinancial
quote:
What is the goal of the trade?
Well, I'm no expert, but it looks like historically during a market crash VIX skyrockets. That being said I guess it wouldn't qualify as a hedge since I wouldn't be selling my regular portfolio during a crash. It could provide me with extra capital to buy during a crash though.
Posted on 8/26/22 at 3:25 pm to Hussss
quote:
Why not: Just buy VIX ETNs when the VIX curve gets into backwardation?
Because I don't know what that means.
Posted on 8/26/22 at 3:42 pm to James11111
VIX might not sky-rocket unless people stop hedging, there's capitulation and a mad dash for insurance via SPX ATM puts. I think most players that can affect markets to that degree are hedged as evidenced by the volatility of volatility. My opinion is mostly B.S. as a disclaimer. Just saying don't mess with VIX just because you think stocks are going down that's not really how it works. If we grind down without capitulation you will lose 100% on your premium.
Posted on 8/26/22 at 3:44 pm to wutangfinancial
I think as a regular little guy retail sometimes trader that this fall is going to be weird in terms of derivative instruments moving WILDLY with people trying to make all sorts of moves
both institutional, retail, and people scared to death
Hence my advice is to be REAL CAREFUL with these things if you do not know what you're doing
or bet a VERY small amount - or paper trade first - to get a feel for how these things can move
both institutional, retail, and people scared to death
Hence my advice is to be REAL CAREFUL with these things if you do not know what you're doing
or bet a VERY small amount - or paper trade first - to get a feel for how these things can move
Posted on 8/26/22 at 3:48 pm to wutangfinancial
quote:
If we grind down without capitulation you will lose 100% on your premium.
Yeah, that's a good point.
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