Option Trading - Volatility Products & when to Trade VIX, VXX, UVXY

Tom and Tony discuss when it is advantageous to trade VIX, VXX, UVXY or some other volatility product. Want to learn more? Watch tastytrade live Monday through Friday from 7am to 3pm CT. https://www.tastytrade.com/tt/live

Comments

1. The easy way to sell fear is buy SVXY (or XIV) when the VIX is high: high to me is 1 standard deviation above the 20 day average or more. Then wait for VIX to revert back to the average. You can also take profits at 50% if you want to do it the TastyTrade way. Don't forget to stay small!
2. They never discuss when to trade each instrument. Lamesauce.
3. The results of the first estimation reveal that increases in price are positively related
   to VIX changes. Specifically, if the option becomes one dollar more expensive, then VIX will
   increase by 0.25% on average. However, if the option is a call, for each dollar increase the
   change in VIX is only 0.11% as the coefficient of the call dummy is -0.14. This suggests a
   greater impact from put price changes than call price changes.
4. 03:30 they don't show VIX futures because they don't have CFE feed generally.
5. Svxy has options and is virtually identical to xiv
6. Svxy has options and is virtually identical to xiv
7. My 401k won't let me trade options, futures, or leveraged ETFs but I can trade VIXY for vol plays.
8. Didn't say when or how to trade them
9. This understanding totally clicked about the VIX and the VXX. I read the entire VXX Prospectus just 3 days ago and THIS explanation was NOWHERE in there. In fact, the implementation detail as explained in this video is more investable than the prospectus itself. Amazing! VXX Downward Drag = Contango + Mathematics Error. Makes me want to short the UVXY for the rest of my life. Investing, done.
10. Most of the stuff they say I don't get (and they said this is heavy stuff), but I think I TOTALLY understand this. Don't know why.
11. u can trade options contracts on it though.
12. I was under the impression that VIX is an index and cannot be traded. Is this wrong?
13. If you want to trade options on an inverse VIX etn, use the SVXY instead of the XIV.
14. If you want to understand WHY second month futures are trading higher than front month, consider the underlying. The VIX represents implied volatilities on the S&P500 - implied volatility exhibits mean reversion - as such, the futures curve is positively sloped because the VIX is expected to grade to its mean (around 20ish I think) from where it is today (around 14ish as im writing this). If the VIX was currently around 30, we would instead be in backwardation by the same logic.