VIX investing

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pilotric99
Posts: 8
Joined: Fri Sep 21, 2012 9:02 pm

VIX investing

Post by pilotric99 »

Regarding a post to another thread where I vacillated over staying in S on Thursday/Friday despite my strategy calling for a move to G, I ended up staying in S. One of my reasons was the VIX being so low, indicating there is not a lot of implied volatility forecast for the next 30 days (my simple understanding of the VIX). Historically, it looks like when the VIX breaches 19/20 and moves to the mid-/upper-20's, S and C funds fall. My read on the current VIX value of 16/17 is that any S/C short-term gains or losses will be minimal....so I'm betting S will outperform G until my next scheduled IFT. Please let me know if my understanding is incorrect.

I then started looking more into the VIX as a personal investment and it is (historically) fairly low @ 16.76. Pre-pandemic, it was 11-15 but spiked occasionally based on implied volatility. I'm strongly considering buying a VIX ETF with my personal funds, such as Barclays iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX), and waiting for one of these spikes, which will eventually occur for one reason or another. Pre-pandemic, VXX was trading between $64-$200 (2018-2020).

Thoughts would be appreciated.

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bloobs
Posts: 1083
Joined: Tue May 21, 2019 8:00 pm

Re: VIX investing

Post by bloobs »

pilotric99 wrote: Sun May 30, 2021 10:35 am Regarding a post to another thread where I vacillated over staying in S on Thursday/Friday despite my strategy calling for a move to G, I ended up staying in S. One of my reasons was the VIX being so low, indicating there is not a lot of implied volatility forecast for the next 30 days (my simple understanding of the VIX). Historically, it looks like when the VIX breaches 19/20 and moves to the mid-/upper-20's, S and C funds fall. My read on the current VIX value of 16/17 is that any S/C short-term gains or losses will be minimal....so I'm betting S will outperform G until my next scheduled IFT. Please let me know if my understanding is incorrect.

I then started looking more into the VIX as a personal investment and it is (historically) fairly low @ 16.76. Pre-pandemic, it was 11-15 but spiked occasionally based on implied volatility. I'm strongly considering buying a VIX ETF with my personal funds, such as Barclays iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX), and waiting for one of these spikes, which will eventually occur for one reason or another. Pre-pandemic, VXX was trading between $64-$200 (2018-2020).

Thoughts would be appreciated.
I have, it did not work out well, I do not anymore.

Why, because the VXX is a short-term "trade" or even a hedge--but it is not an "investment".

My mistake was that no one explained that concept to me back then.

BelieveGod
Posts: 15
Joined: Thu Feb 15, 2018 10:56 am

Re: VIX investing

Post by BelieveGod »

Thanks, enjoyed this read.

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Fund Prices2021-06-18

FundPriceDayYTD
G $16.61 0.00% 0.60%
F $20.88 0.32% -1.49%
C $62.45 -1.31% 11.69%
S $82.88 -1.28% 11.70%
I $38.60 -1.78% 9.07%
L2065 $13.75 -1.45% 10.74%
L2060 $13.75 -1.45% 10.74%
L2055 $13.75 -1.45% 10.74%
L2050 $28.08 -1.17% 8.79%
L2045 $12.83 -1.10% 8.27%
L2040 $46.86 -1.03% 7.76%
L2035 $12.40 -0.94% 7.17%
L2030 $41.33 -0.86% 6.58%
L2025 $11.75 -0.66% 5.27%
Linc $22.90 -0.31% 2.77%

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