Dec. 25 at 5:42 PM
$VIX falls to its lowest level of the year: 13.5, is there an opportunity?
Is this a good opportunity to buy the
$VIX?
No. The
$VIX itself is an index and cannot be bought. You can only access it through futures or derivatives such as
$VXX,
$UVXY, or the January VIX future.
So what does this mean?
It means you can effectively buy VIX exposure at ~16.9 while the index itself is at 13.5.
Buy or short?
The
$VIX index (13.5) acts as a gravitational force for VIX futures (16.9). As a result, you are ironically much better off shorting
$VIX exposure here via its derivatives (
$VXX,
$UVXY, or long
$SVIX) rather than trying to “buy the VIX.”
