LD Lossdog Research
topic

volatility index

5 matching records.

Trade idea

VIX Inverse relationship with S&P 500

The VIX futures and S&P 500 typically have an inverse relationship, where an increase in the S&P 500 is generally associated with a decrease in the VIX. However, this relationship is not consistent and can deviate, especially during volatile market conditions. The speaker notes that while there is a correlation, it is not reliable enough to be traded as a strategy due to its variability. The speaker suggests that a 10-cent move in VIX futures is usually good for a 10-handle move in the S&P 500, but this is not always the case. The speaker also notes that a 10% move in the VIX is usually associated with a 2% move in the S&P 500.

View full notes
StrategyInverse relationship with S&P 500
Assetvolatility index
Time horizonShort-term, with a focus on daily or intraday movements
Entry / triggerWhen the S&P 500 experiences a significant upward move and the VIX futures do not move in the expected inverse direction
Target / exitA 10-cent move in VIX futures for every 10-handle move in the S&P 500
Invalidation / stopIf the VIX futures move in the expected inverse direction, indicating the relationship is functioning as expected
SpeakerSpeaker
Risks
  • The inverse relationship may not hold during volatile market conditions
  • The relationship is not reliable enough to be traded as a strategy
  • The VIX is difficult to hedge with the S&P 500 and vice versa
longlongVIXvolatility index
medium confidenceVerify in video at 46:51 ↗
Trade idea

VIX buy VIX futures or options

Given the current levels of implied volatility and the VVIX at 90, the expected move of the VIX is statistically likely to include a level above 20. This suggests that the market's volatility is expected to be significant, and traders should consider this when assessing potential moves in the VIX. The probability of the VIX closing above 20 before September 2026 is estimated to be over 90%.

View full notes
Strategybuy VIX futures or options
Assetvolatility_index
Expiration2026-09-01
Time horizonlong-term (2026)
Entry / triggerVIX closes above 20 before September 2026
Target / exitVIX closing above 20
Invalidation / stopVIX remains below 20 for the entire period
SpeakerMarket Analyst
Risks
  • The VIX may not reach the expected level due to unforeseen market conditions
  • Volatility can be highly unpredictable, leading to potential losses
longlongVIXvolatility index
high confidenceVerify in video at 28:13 ↗
Trade idea

VIX Buy VIX futures and sell out-of-the-money calls on VIX

The speaker suggests a trade involving buying VIX futures and selling out-of-the-money calls on VIX, which is described as an expensive trade due to the lack of margin relief on either side. The trade is considered capital-intensive and not easy to make, but it is presented as an intelligent way to put the trade.

View full notes
StrategyBuy VIX futures and sell out-of-the-money calls on VIX
AssetVolatility Index
ExpirationNot specified
Time horizonNot specified
Entry / triggerVolatility under $19
Target / exitNot specified
Invalidation / stopNot specified
SpeakerSpeaker
Structure / legs
  • Buy VIX futures
  • Sell out-of-the-money calls on VIX
Risks
  • High capital requirement
  • Complex execution
  • Potential for significant losses if the market moves against the trade
ShortshortVIXvolatility index
high confidenceVerify in video at 38:08 ↗
Trade idea

VIX selling premium into rich volatility

The speaker prefers selling premium into rich volatility, as it allows traders to get paid for taking risk. This strategy is more effective when volatility is high, as it provides a better risk-reward profile. The speaker expresses caution about low volume stocks during earnings season, suggesting that the strategy should be applied with care in such environments.

View full notes
Strategyselling premium into rich volatility
Assetvolatility_index
Expirationnear-term
Time horizonshort-term
Entry / triggervolatility is high
Target / exitvolatility reverts to lower levels
Invalidation / stopvolatility continues to rise
SpeakerScott
Structure / legs
  • short straddle
  • short strangle
Risks
  • volatility continues to rise
  • earnings announcements may cause unexpected price movements
  • low volume stocks may not provide sufficient liquidity for effective premium selling
shortshortVIXshort-termvolatility index
medium confidenceVerify in video at 46:55 ↗
Q&A

What is the current state of the market?

The market is experiencing significant volatility, with the S&P 500 down 30 points at the opening, rallying to a 15-point decline, and then falling further to a 65-point decline. Other assets like gold, silver, and Bitcoin are also down, while the VIX is up.

View full notes
Actionable takeawayThe market is showing signs of fear and uncertainty, with multiple assets declining and the VIX indicating increased volatility.
VIXBitcoingoldVolatilityS&P 500silvervolatility index
high confidenceVerify in video at 07:05 ↗