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30335984 No.30335984 [Reply] [Original]

With SPY, you can't just buy low and sell high, because it might just go up and then never come down. But VIX always goes up and down eventually.

>> No.30336527

>>30335984
Okay, how about an example?

Say, when VIX is really high, you buy SVXY. Then you wait a while and then sell once things calm down. What's wrong with this plan?

>> No.30337116

>>30336527
seems like a good plan based on the chart but maybe there are other things to consider? high fees? decay?

>> No.30337172

>>30337116
Okay, looking into this some more, ETFs don't work because of contango.

Now I'm wondering if you could just buy or sell the options that VIX itself is based on, for a delta neutral strategy.

>> No.30337228

>>30337172
so you mean like buying put options on the VIX futures when it spikes? how exactly do you make this a delta neutral strategy

>> No.30337232
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30337232

>>30335984
this is what TQQQ will look like when the next dotcom tier crash hits Nasdaq

>> No.30337267

>>30337228
No, buying the options that VIX is based on. Not futures.

>> No.30337275

>>30335984
why don't you just trade vix without shorting it

>> No.30337584

>>30337267
>Not futures
why not futures?

>> No.30337619

>>30337584
Contango. If the market expect volatility to go down, then that will be reflected in the price of futures.

>> No.30338332

>>30337619
>Contango. If the market expect volatility to go down, then that will be reflected in the price of futures.
If the market expect volatility to go down vix call option will cost more

>> No.30339193

>>30337267
and how do you make it delta neutral?
another thing, during spikes I believe the premiums would be very high, and if you buy calls when it is low then you could be waiting for years

>> No.30339468

>>30338332
You mean options on VIX futures? I'm not sure I understand what you're saying.

I'm talking about shorting SPY options.

>> No.30339499

>>30339193
I'm not sure about the details, but aren't delta neutral option strategies a thing? Both a put and a call, so their deltas cancel out, or something like that.