Trading Volatility

The market had a wild dip last Thursday at 2:30pm.  There are many theories behind it, but no one seems to be sure exactly what happened.  One thing for sure is that volatility has spiked way UP! For daring souls who are willing to bet on volatility calming down (and it eventually will!), you can buy futures on VIX or, more conservatively (if there’s such a thing), short $VXX or $VXZ (if they are available for shorting) after they spiked.  As long as you can maintain your margin (so don’t get too greedy) and rides out the storm even if the market swings even wilder, it’s almost certain that one can make money in a short period of time.

VXX 3 Months chart


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