May 6, 2008I was just reading over the VIX page on the CBOE site and there are some good resources if you scroll down the page, including this graph:
In short, that shows that having 20% of a stock portfolio in VDX futures will reduce portfolio volatility a good deal, while hardly affecting your return. There are a […]
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June 6, 2007I have been thinking recently about how to use the VIX to hedge against volatility. For example, a short straddle is supposed to count on volatility decreasing over the short term. So theoretically, buying a call on the VIX may allow you to hedge against a jump - the straddle goes bad, but a gain […]
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June 6, 2007I just ran this trade in my OptionsHouse software:
VIX July 13 - long 1 call
VIX July 14 - short 2 calls
VIX July 17 - long 1 call
and it can be done for a credit - very rare. You do have to put up Margin, and the trade will be unprofitable if the VIX closes above […]
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May 15, 2007I’ve become very interested in Butterflies recently, especially reading about Market Wizard Tony Saliba. I thought this might be a strategy, much like a box, that only market makers can take advantage of, but I’m finding that is not the case after looking around a little bit.
The key to making a Butterfly work is to […]
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