Based on searches that lead people to Six Figure Investing, these are the top 10 questions people ask about volatility investing: How can I buy/trade/invest in the CBOE’s VIX® index? The short answer is that you can’t. No one has figured out how to do this economically. However, there are quite a few investment approaches that allow you to trade in volatility, including futures, options on …
Update A comment on this post from “~”, writer of the Volatility Futures and Options blog, revealed that in this post I made the mistake of assuming that correlation meant causation in analysing the data—a danger I warn against in Patterns, Predictions, and the Correlation Fairy. It’s too bad, it was a fun story. I’m not beating myself up about it, but it illustrates the …
The dynamically updated chart above uses delayed quotes from Google Finance. It details the interpolation / extrapolation process that computes the 30 day VIXMO from two close-in months of SPX options (VINMO and VIFMO). This calculation is the legacy version of the VIX that was used from 23-Sept-2003 through 5-Oct-2014. On October 6th, 2014 the CBOE modified the calculation to start using SPX weekly options …
Update TRSK & SPXH were shutdown in March 2018, probably because they never gained enough assets to be profitable for the issuer. In general, these fund performed as expected. They likely would have really done well in a major correction or bear market but that didn’t happen during their lifetimes. Their main weakness is that they tended to lose value when volatility makes sudden shifts. …
Update Trade Options Weekly no longer appears to be around, but there are people still providing the same basic strategy (e.g, 5Percent{PerWeek.com). Be aware these are high risk strategies Original Post If you do any amount of browsing on stocks and options you’ve seen ads for services that tout weekly percentage gains of several percent. I’ve never really been tempted to investigate these—I reflexively …
