Selling vix call options

Selling vix call options

Author: Jute Date: 24.06.2017

Talk about a "catch-a-falling-knife" trade! One security that I mentioned when I wrote last week about how to play U. Even more extraordinary is the decline in the ProShares Ultra VIX Short-Term Futures UVXY , a 2x play on daily changes in the VIX.

Now, VXX and UVXY get rebalanced every day, which causes massive distortions vs. But really, volatility has been on sale since February and the markdown is amazing. Still, the world isn't as hunky dory as the pricing of volatility implies, and the way to make money is to find the point at which a trend reverses.

Personally, I think that we're there with volatility. Now, today is an options-expiration day for stocks, although VIX options expired on Wednesday.

How to Buy A Call Option, Buying Call Options Examples

We're going into a September options month that will see "triple-witching" at expiration on Sept. But given the inherent weakness in VXX and UVXY, we're better off doing so by buying VIX options.

selling vix call options

The market sets prices for these options based on volatility, duration and distance from the strike price. An options contract with a closer expiration date has less "time premium" baked in, so it's more likely to see impacts from changes in volatility. We're trying to go long on volatility, so that's exactly what we want. The VIX ended yesterday's regular session trading at So, I'm buying that contract and hoping that volatility sees a return to normalcy. The Bottom Line We saw a pronounced spike in the VIX to above So, that's my suggested trade to liven up your portfolio in the midst of the market's summer doldrums.

You might recall that the VIX slumped from mid-July to mid-August last year, but we all know what happened after that. Let's bet on that happening again this year! At the time of publication, Collins was long VIX September call options, although positions may change at any time.

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Why I Like September VIX Call Options

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selling vix call options

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selling vix call options

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