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Home › Forums › Swing Trades › “Support” Buy in VIX
Spot VIX is down back under 13, “trading” at 12.72
Now you can’t actually go out and buy the VIX.
And the VIX derivatives actually have different prices.
The asset we’ll be trading against is the May VIX future, which currently has a value of 16.
That means if we go into May VIX opex and the spot VIX is at 13, then the VIX future will converge to that price.
That’s the downside risk.
I think that we’re headed into resistance on the SPX and the market has seen the actual vol hover around 10 for too long.
Here’s the trade:
Buy VIX May 17 Calls @1.20
ADD To the Trade @0.90
Sell half at a double
Trail a stop if spot VIX manages to clear 17.
Now a question was asked… why not “buy” more time by picking up Jun calls instead?
Well you can, but Jun calls are on a different underlying… the Jun VIX future.
And *that* price is currently sitting at 17.50. You end up with a touch more risk.
If you want a “gentler” trade to take, look at this:
Buy to open VIX May 13 call @3.20
Sell to open VIX May 17 call @1.20
So max risk is $2, max reward is $2, breakeven into VIX opex is right around 15.