VXX trade ideas
Prepere yourself for buying opportunities ... So there we are ... CPI little bit higher than exceptating , powel clearly talks about monetary policy and Trump goin wild with tarrifs ... what to except in this macro&political economic driven environment ? I don't think it will grow to extreme values now. Rather, there will be some more carving and from a short-term perspective an opportunity to buy at a good price ... Well, it is very important, at least for me in this environment of a trade war combined with a period when historically the Fed has raised rates and not lowered them as many expect. It is important to take profits and hold losses short and uncompromisingly exit losing positions. The year 2025 will be full of opportunities, which goes hand in hand with pain. What is heaven for one guy is hell for another guy. I am a fan of everyone who tries to make money in this environment and I hope to rob you of your money. Because that is what the market is about. Good luck and enjoy your game
Trading the VIX - A Balanced Strategy for Smart InvestorsWarning:
This strategy is presented as a trading idea and should not be considered guaranteed trading guidance. Traders are responsible for their own decisions and should carefully evaluate risks before executing any trades.
Given that VIX is generally between 13 and 20, I designed this option strategy.
Combination VIX Vertical Spreads
Strategy Overview:
Days to Expiry (DTE): 37
Option Positions:
Buy VIX 13 Call
Sell VIX 15 Put
Sell VIX 20 Call × 2
Visualized Setup
Strategy Summary:
This strategy results in a combination resembling a modified short straddle centered at VIX 20. However, in structure, it is better understood as a short strangle (neutral) combined with a bull call spread (bullish). The bullish component of the spread suggests that the trader expects the VIX to rise above 13 but remain below 20. The inclusion of a short strangle component helps offset the premium of the debit call spread.
This structured approach allows for a calculated risk-reward balance, aligning with the trader’s outlook on implied volatility while leveraging option spreads to optimize capital efficiency.
Risk and Reward Assessment:
The strategy is heavily weighted towards a long VIX bias, meaning the trader anticipates an increase in VIX, though at a measured pace within a month.
There is a slight increase in risk to the short side of VIX due to the exposure created by the short options.
The expected profit range suggests that VIX volatility will stay within a defined range of 14 to 24. While the trader acknowledges the possibility of VIX exceeding 20, it is not expected to surpass 24.
The probability of profit at expiry is estimated at 65% if entered today. Despite the additional short-side risk, the overall risk remains comparable to a standard short strangle.
Historical VIX data indicates that the index fluctuates between 12 and 40 on a monthly basis, with a 52-week high of 65.7 and a 52-week low of 10.6. This reinforces the strategy’s inherent higher risk to the long VIX side.
Key Considerations for Execution:
Event Risk: Confirm that no major events (e.g., geopolitical instability, Federal Reserve announcements) are expected that could push VIX above 30.
Entry Timing: Optimal entry is when VIX is at a relatively low level, such as observed last Friday (2/7/2025) morning.
Exit Strategy: The position should be closed in approximately two to three weeks or when profit exceeds 100%.
Notes and Alternative Strategy:
One challenge of this strategy is the uncertainty in determining a precise stop-loss strategy. However, given the nature of a strangle, there is no immediate need to exit within the first 20 days, making it a relatively "lazy" management strategy. The trader has ample time to adjust after the initial 20-day period.
Management should be approached by treating the bull call spread and short strangle separately. Given the natural variance of VIX, this approach should not be overly difficult to execute.
A suggested alternative strategy might provide more controlled risk exposure. For example, I would start the trade with a butterfly at 20 if I see the potential rise of VIX. Then, I would reassess it after 30 days (assuming DTE=37; a shorter DTE may also be considered). Alternatively, I could simply wait until expiration day to make a final decision. This strategy has a limited loss while maintaining a similar profit potential.
The suggested strategy manages the cost-efficiency aspect while also limiting potential losses. The decision-making process can then be based on market direction after the expected conditions begin to form.
In comparison to the original strategy in terms of profit and exit timing, the proposed strategy may offer a faster exit, whereas a butterfly setup may require waiting until expiration. However, traders may find early exits possible for condors or strangles.
Here is a visualization of the alternative setup:
Alternative Strategy Visualization
Thank you for reading. Wish you a successful options trading!
VIX spiking....UVIX easy tradeWith all the tariffs and hyper-valued stocks, the VIX is bound to spike at high-levels. Let's take a look at historical spikes and we are only in the beginning stages (+10% just from Friday). Use UVIX to take advantage of this awesome set-up.
All the best and always do your own due diligence!
VIX indicates trouble aheadDisclaimer: This idea is not intended as investment advice and should not be interpreted as an offer to sell or a recommendation to purchase any asset. Any decisions made based on the information presented in this idea are the sole responsibility of the individual. All investment decisions should be made independently, taking into account your financial situation and objectives.
VIX (SVIX)....easy trade with great upsideThis is one of my darlings and it has taken a few days to get to this point so pay attention to potentially make some delicious lemonade....First, don't place a position until it crosses the yellow / red lines! 10 SMA / 50 SMA and see an upward slope trend shown by the LRS indicator. The target price here is around $15 "ish" with some health drawdown that is the toll to go on this highway. But this baby can easily go up to 17/18ish in a matter of hours or few short days.
Place your notification alerts early, but realize there could be some consolidation before it jumps back up again....you can do it!
Best of luck, do your own DD, and safe trading!
VIX | Stock Market Correction IncomingVIX is the ticker symbol and the popular name for the Chicago Board Options Exchange's CBOE Volatility Index, a popular measure of the stock market's expectation of volatility based on S&P 500 index options. It is calculated and disseminated on a real-time basis by the CBOE, and is often referred to as the fear index or fear gauge.
The VIX traces its origin to the financial economics research of Menachem Brenner and Dan Galai. In a series of papers beginning in 1989, Brenner and Galai proposed the creation of a series of volatility indices, beginning with an index on stock market volatility, and moving to interest rate and foreign exchange rate volatility.