Tim Watley’s Trading Wisdom

“Is the VIX safe?”

“Yes yes, it’s very safe”.

Actually not even sure what that means. Been posting, reading posts, and emailing about the VIX futures last couple days. At the end of the day, no one “knows” what’s going to happen, including the collective wisdom of VIX futures and options traders. In 2008, VIX obviously mertited it’s premium above realized volatility, and the upsloping VIX futures curve was *right*. In 2009 it was wrong. In fact it stayed wrong for the most part until May 2010.

I wouldn’t spread short vs. long, but maybe I would use the spread to decide which cycle to play. If you want to net short options (or VIX) I’d go out a few month’s in time. If you want to net long them, go close in time. If you do both, just look at it as 2 separate trades.


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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