http://finance.yahoo.com/echarts?s=V...urce=undefined;
Buy put options on S&P 500 futures indeces like VXX with a maturity date of Jan 14 or Jan 15. This isn't because the actual volatility of the S&P 500 keeps going down, but because these indeces always go down regardless of what the S&P 500 volatility actually does. I can't put everything about how these indeces work into words without it sounding confusing, but what these indeces end up doing is basically always buy the volatility futures at a high and sell volatility futures at a low. The chart I linked above shows what I mean, the blue line is measuring VXX, the red line is measuring ^VIX, what VXX is supposed to measure. There really isn't any way to short the index, so buying puts is the only option.
This article does the best at explaining it a lot better than I just did:
http://investorplace.com/2012/07/vxx...h-goes-to-die/
*Once funds transfer, I plan on buying some puts, but I don't hold a position as of writing this.
Last edited by DUNCANownsKOBE; 02-06-2013 at 12:08 PM.
I would probably take the 14 and not the 15. As you know, the fed is going to start looking seriously at raising rates next year (they said last year that they would keep rates where they are for two years). This will likely cause a e in the VXX and would present a good buying opportunity AT THAT TIME for the 15s.
Then again, I could be full of . LOL
What are you buying at? 15?
I thought option trading were outlawed by Dodd and Friends.
I'm gonna do more research before buying, prolly gonna buy $1000 to $2000 worth of puts that expire January 2015 with a strike price of $15-$17.
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