Vix

[buymesoTar]

A few years ago I listened to a man on CNBC talking about buying up the VIX because it was at an all time low and it couldn't go to zero. I'm not saying that right now is the right time to buy it or not but I am interested in knowing more. Does anyone know how to go about this and is this true? With the VIX @ 11.51 it is something I want to look into. Thank you in advance for any information.

[Bughthato]

The VIX is the CBOE volatility index. It is wrapped around the options volatility. And yes it is perceptibly low right now.....but that doesn't mean it can't go lower. Basically going long on the VIX right now would be a hedge against a drop in the over all market or a bet that the market will go down. If the market drops volatility will go up. But I believe it is a good long position right now as I like to buy into weakness.

[BurtonKr]

That is along the lines of what I am thinking also. I wouldn't mind starting a position in it and buying more on weakness. The issue that I am having is figuring out how to buy any. I currently have a sharebuilder and tradeking account and neither offer it (VIX). May I ask how you are purchasing positions in this?

[btbfrbhp60]

You can't actually own the VIX. You can play the futures though and there are short term etf's/etn's you can play that do the futures game for you. But timing must be right as these are designed to go to zero in the long-run.

VXX UVXY TVIX are the more popular ones with liquidity. The only way they don't go to zero is because they reverse split them. I day-trade them only when the market has ugly down days.

But you're right though, it may be due for a bounce if/when the market pulls back a bit. It's worth watching those etf's again.

EDIT ADD: You may want to check out bear etf's like FAZ, DOG, SQQQ, TZA, etc. As these are short leveraged etf's BUT they will not perform as well as shorting the market, they are just an easy vehicle to use as a hedge. There's plenty available, just search for 'short' or 'bear' or 'inverse' etf's as they are named

[Brucetib]

Interesting story.....

16:49 EDT - After CBOE Volatility Index closed Friday at a 14-month low, many in the market were expecting a pick-up in the sinking fear gauge. Indeed, VIX has climbed both days this week, but those gains haven't translated for iPath S&P 500 VIX Short-Term Futures ETN (VXX), the largest exchange-traded product tied to volatility futures. VXX has fallen on each of the past two days to the tune of 3.3%. To be clear, the prices aren't supposed to match; VIX is an options-based mathematical calculation, while VXX is tied to VIX futures. Still, the recent divergence is pretty rare: last time VXX fell twice in a row as VIX rose was in September.