The iPath S&P 500 VIX Short-Term Futures ETN is designed to provide investors with exposure to the S&P 500 VIX Short-Term Futures Index Total Return. The S&P 500 VIX Short-Term Futures Index Total Return (the "Index") is designed to provide access to equity market volatility through CBOE Volatility Index futures. The Index offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects the implied volatility of the S&P 500 at various points along the volatility forward curve.
The stock market had its lightest trading day of the year yesterday. The SPY (tracking ETF for the S&P 500) traded 50 million shares. While the markets were mixed, the VOLATILITY S&P 500 (INDEXCBOE:VIX) closed down almost 4%, below 12.00. The volatility index (VIX) measures fear in the market. A reading below 12.00 shows total complacency, no fear at all. Historically, when the VIX is below 12.00 it has ALWAYS been a great buying opportunity. In fact, history shows that buying the VIX below 12 will almost always net a near term pop to 18+. This is a whopping 50% return. Essentially, the markets work in a contrarian way. When fear is absent to such a degree from the stock market, usually the markets top. When the markets fall, fear increases and the VIX jumps higher. With a closing level of 11.97 today on the VIX, a huge opportunity presents itself. Historically the VIX has only really ever dropped to the 10-11 range, and that is extremely rare. That means that the once a decade risk is 10% while the upside is 50%. In a risk to reward basis, this is an awesome opportunity. To trade the VIX, the average investor can buy the iPath S&P 500 VIX Short Term Futures TM ETN (NYSEARCA:VXX). By Pro Trader Jenny Rebekka
what's up @I_am_so_siri wow i remember you from way back when you called the market bottom back in 2009 on the old hsm yea i think i've only seen vix below 11 like twice ever in the 10 years i've been in the markets ... we're not too far from doing it again here ... vix down at 11.59 today ... i think we're getting pretty doggone close to long vix here
rare indeed i think i've only recalled seeing a sub 11 print on the VIX like twice ever ... i was beginning to wonder if we were about to make a run for that 10 handle today ... we got close lol
I have been patently waiting to buy vix calls and go long uvxy for a while. I wanna do it on a day where dow is up at least 100. 200 is really what I wanted to see but now that vix is in 11's I feel it's very close to time. I only expect a pop to about 17 or 18. Unless some bad news comes out while I'm holding the position.
I am not very familiar with VIX so I have a question for you guys. When you say "going long with VIX", is that even possible to trade it as a stock? I tried to find it through my brokers but I just cant find it. I found VXX but seems like there is a decay factor for this one. Long story short, is there anyway to go long VIX without being exposed to decay?
nope, there is no way to trade the vix straight up with ETFs. they only have those etfs that suffer from contango. so unless you forsee the spx having a huge move to the downside i wouldnt play those etfs.
Yeah the decay is the problem. I use a very tight stop on these trades. Decay is the reason I haven't made a move yet. I feel it's best to wait for a bigger move
The Volatility Index tells everything. In analyzes the fear and greed of investors. Throughout the history of the markets, there is always a key level or levels that when broken, trigger a higher amount of fear inside investors. Think of it like a breakpoint. There is a level on the iPath S&P 500 VIX Short Term Futures TM ETN (NYSEARCA:VXX) I am watching for that very trigger. It is a level that has been defended over and over again. Should this point be broken, fear will spike dramatically, thus the VXX will shoot sharply higher. The level is a daily close above $36.85. If this breaks, the VXX will pop to $38 almost immediately. Jenny Rebekka
VIX creeping up here ... nearing 15 and hitting highest levels since early June which is still pretty low historically speaking ... but we've been in such a low volatility market this summer that a move up to 15 seems high lol ...could September finally bring in some volatility for this market?
hey @I_am_so_siri ... how's this looking now? we finally got the pop to the 17s this week ... you still thinking 17 or 18 is tops for this pop? great call btw! and good patience, that played out perfectly there for you man
I lucked out. Was sitting around looking at stocks Thursday night and after multiple looks I said screw it and bought uvxy in after hours. Didn't get calls on vix though. Not sure how long I wanna hold. This market shrugs off drops so eaaily. This drop wasn't caused by any type of surprise news.
Man Tim @Vegastrader66 was calling for that spike a week ahead of time noting the tightening of the BB's and more importantly that VXX had been outside the BB's. That was an awesome call!
