^VIX VOLATILITY S&P 500: Re: Money doesn't come any easier than this

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	Alex O'Reilly
	Philadelphia User since Nov 2010	71
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Re: Money doesn't come any easier than this

Ok, I'll bite on this. Simply because I no longer have any open coverages and I know Alex Nation is waiting with baited breath for my next pick. While I wait for ATVI or GRPN to drop low enough into buy territory, I'll agree with Barry here and basically short the short term market.

This is a reply coverage to ^VIX: Money doesn't come any easier than this by Barry Hebert on 12/1/11.

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What People Are Saying...

David Sachdev disagreed at 12/1/11 11:11 AM Price action was $27.34 -0.46 (-1.7%)

David Sachdev said at 12/5/11 12:25 PM Price action was $27.06 -0.46 (-1.7%)

I was right to disagree as of yet, but I am surprised that we haven't seen the VIX give up a bit more today.

I still don't think that the VIX should be covered here directly...because the Volatility of the VIX itself factors into any instrument in which you can trade this like the Options, Futures, or the ETNs.

Mike Barkett said at 12/12/11 9:55 AM Price action was $27.25 0.87 (+3.3%)

It's true the time value of the VIX itself mucks with the price you can get, but the real world gains/losses are similarly drastic. Until we implement options, it's the best we can do with VIX.

And realistically, if you bought VIX calls on 12/1 at 27.33, and it goes to exactly 32.50 on 12/20, but not before, then you might still make at least 10% or so just due to the volatility even though the time value should be nearly 0. I'd agree with you and remove the option to cover it here if it were the opposite situation of that (i.e. cover for 300% gains, but only 20% is realistic) but in this case it should be implied that the follower understands they are trading a different vehicle and could make at least what is predicted.

Mike Barkett said at 12/12/11 3:57 PM Price action was $26.65 0.27 (+1.0%)

BTW I might have to disagree with this. I was thinking of making a big call here on the 32.50's at .70, but the VIX has not popped for December expiration since 2002. Let me check if I can still sit down.... yep... balls not big enough to take that bet. Good luck longs.

David Sachdev said at 12/13/11 10:48 AM Price action was $23.54 -2.13 (-8.3%)

Breaking below the 200 day moving average.

David Sachdev said at 12/22/11 8:27 PM Price action was $21.16 -0.27 (-1.3%)

hmmmm....maybe now is the time to go long the VIX

Mike Barkett said at 12/22/11 9:10 PM Price action was $21.16 -0.27 (-1.3%)

Glad I did not make those calls. I have been meaning to point out that the VIX will simmer under the radar when it drops below the 25 point. This seems to be an indicator of a pretty good market run. Then, something hits the fan and we start seeing those reliably wild swings. Since the only way to trade it is via options, I think we have to wait until that first wild swing to start going long again. Just a theory.