Is Now A Good Time To Trade VIX?

Mark Sebastian

The Option Pit VIX Traffic Light Is Green: Volatility is likely to go up or stay high.

Hey Traders,

Markets are confused …

And the VIX might be, too.

Or at least one of the Option Pit VIX Traffic Light indicators.

So does this mean “back away” from the VIX pits?

Or is now actually a good time to trade VIX?

For one, take a look at this vol term structure …

This is a wild VIX curve …

Right now, it is currently VERY confused.

Traders do not seem to know what to expect next.

However …

Right now, the VIX of VIX, VVIX, is low …

I have been on the lookout for VVIX to potentially explode higher for quite some time now …

And it is just not blowing up.

In fact, it is currently moving even LOWER.

This means VIX options are CHEAP.

So is right now a good time to buy VIX options?

I would say yes.

Personally, I will be looking to buy VIX call spreads, and VIX out-of-the-money (OTM) puts.

Your Only Option,

Mark Sebastian

VIX Edge

Mark Sebastian

Mark Sebastian is a former member of both the Chicago Board Options Exchange (CBOE) and the American Stock Exchange (AMEX), where he spent years mastering the art of options trading in the most competitive environment imaginable. As Chief Investment Officer at the hedge fund Karman Line Capital, Mark manages sophisticated options strategies for institutional clients. He is the author of two highly regarded books on options trading: ‘The Option Traders Hedge Fund’ and ‘Trading Options for Edge.’ Mark is a frequent guest on major financial networks including CNBC, Fox Business News, Bloomberg, and First Business News, where he provides expert commentary on market volatility and options strategies.

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