Someone's Betting Big On Coming Volatility; How And Why They Might Be Doing That - Seeking Alpha
Here is an outstanding article by Robert Wagner about making trades based on how the VIX volatility index will behave. Robert mentioned typical limits for VIX and how to trade those limits. Since a lot of people don't trade options, a person could buy a volatility ETF like VXX or TVIX. You must buy these ETFs when they are near their low values during calm times because recent volatile times have been quickly resolved, and you only have a short window of opportunity to take your profit. Also, TVIX has had a number of reverse splits due to constant decay. You should only buy TVIX if you think you will profit in two or three months at the longest. I currently own a small position in TVIX, but I probably won't hold it past May of this year before selling most of it.
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