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Options JiveWhat to Do When VIX is Low | Jun 6, 2017
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    Options JiveWhat to Do When VIX is LowJun 6, 2017

    The VIX index gauges 30-day implied volatility in SPX and the options on the VIX allow investors to trade their volatility assumptions, whether it is to speculate or hedge portfolio positions. Recently, the VIX has made new all-time lows. On this episode of Options Jive, the guys discuss what to do when VIX is low.

    From past experience, when VIX makes new 1-year lows, we haven’t see as large of a rebound as we would expect. In situations where volatility is low we depend on strategies such as: Calendars, Bullish Debit Spreads and Bearish Debit Spreads (Debit spreads positioned around ATM strike). But we can also attempt to directly buy Implied Volatility by going in the VIX options market. The S&P 500 Implied Volatility Index might be hanging near all-time lows, but this does not stop us from making opportunities.

    When VIX is low:

    • Implement our low IV strategies
    • Attempt to get long VIX
    • Continue to sell Premium in SPY

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