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Volatility still cheap


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#1 sluzbenik1

sluzbenik1

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Posted 07 May 2012 - 12:49 PM

Is VXX at 16 or under a steal? Probably, but watch out for that contango.

Would you like less contango and anxious screen watching? Try VXZ or find one of the other VIX ETN/ETFs. I'm still working my way through them all.

Do you not want to bother, but have a volatility forecast? Try VQT. Even better, you can front-run it since they let you know when the S&P/Vix futures allocation is going to change. Has a built-in internal stop loss - with no tax cost to you.

I am long VQT as of Friday. Should be flipping over to higher allocation to VIX futures soon, if my forecast holds. And I'm wrong, well, I just won't make any money, but I sure as heck won't lose much. Here's the info on the method: https://barxis.barca...trumentId=73025

VQT is pretty good - though not as good as calling a slide with VXX or a short. If your timing isn't perfect, try VQT. Go look at the chart vs S&P and see what a little allocation to VIX futures can do for your portfolio given the leverage involved. Yeah, in a prolonged low-volatility uptrend this will suck, slowly and surely...

Edited by sluzbenik1, 07 May 2012 - 12:50 PM.