BY ANDREW GIOVINAZZI
August 25th, 2025
Hey there, Andrew here.
I just taught my Rip Zone class something that made their heads spin – how to own a VXX call where you literally cannot lose money. This isn’t some bullshit marketing hook. This is actual market maker synthetic equivalence that most retail traders never learn.
Here’s the setup: You own a VXX 39/37 put spread that you paid $1.10 for.
Now what if I told you that buying the 37 call for 57 cents gives you a 39 call that you own for a 38-cent CREDIT?
I asked my class this exact question. Crickets. “So nobody here understands synthetic equivalents,” I said. Tom guessed “synthetic stock” but that’s not it. Synthetic stock is one piece.
The answer blew their minds: You now own the 39 call essentially for free – actually better than free, you get paid to own it.
Position Awareness is Everything
This is what separates pros from retail. When you’re a market maker, you have to know how every position acts because you have a bazillion positions on. You couldn’t just wing it.
Most traders buy vol products because “VIX is low.” I get it. But for us, you’re interested in whether VXX is gonna drop 29-30 cents a day. At $1.50, that’s $1.50 a week decay. That’s $6 a month of pure mathematical decay working in your favor.
The Magic of Curve Steepness
Right now your September contract is a dollar over fair value if you have your OP sheet. When you see that green line, it means there’s an edge in the vol products for you.
You can buy puts in vol where the puts will pay for any long upside you want.
This is the most magical trading thing there is.
Here’s How to Execute This
The setup I’m putting on today: Buy three VXX September 19th 34 puts for about $1.05 each, then buy one VXX September 19th 40 call for $1.50.
I expect this position to yield about 75% gain on decay alone. These puts should be worth $2.50 each just from normal contango decay.
But here’s the real beauty: If volatility rips, it’s so easy for that call to be worth four bucks. You’re covered both ways.
Why This Works Now
VIX has dropped a little bit since I left for vacation, but VXX has dropped a lot. When I left we were trading around 40, now we’re at 36. That’s over 10% while VIX only moved a dollar.
The curve is steep as hell right now. You’ll never have a better opportunity than when the curve is this steep. You wanna buy as many VXX puts as you possibly can afford, then buy a long option against them.
Position Management Reality
If these puts double in value – which is pretty easy for them to do – you’re selling them for over $2.
You’re into your trade for $4.50 and you’re gonna be out of your puts for $6. Meanwhile, your call is sitting there as pure upside protection.
The hardest thing with vol products is just being happy when you make some money. But when you structure positions like this, you don’t have to time anything perfectly.
The Real Edge
This has nothing to do with VIX going up or down at this point. It has everything to do with these future values being ridiculous. Right now to buy VIX you have to pay 17 bucks when the underlying is trading 14.35. How do you make money doing that?
You don’t. You lose.
Bottom Line
We just closed our August 29th put spreads for $1.70 – nice win. Now we’re setting up the exact same type of trade but moving the strikes. As long as your vol curve stays this steep, you can keep rinsing and repeating this trade every single week.
That’s how you turn market maker knowledge into consistent profits while everyone else is just guessing.
We’re doing some really cool stuff in RipZone, if you’re not there with me and would like to learn more about the program, give us a call at 888-872-3301 … and someone from my team will set you up.
—Andrew “Back From Vacation” Giovinazzi