Strategic Approach to Volatility Trading: Preparing for VIX Down
When the VIX drops below $12, it's time to consider a cautious approach. Instead of jumping in headfirst, I gradually enter long positions in UVIX and UVXY calls over the course of one week to several months, while directly holding onto VIX, UVIX, and UVXY.
Past experiences with mistimed UVXY Long Calls, particularly during the pre and post-COVID periods, have taught me to be wary of recency and confirmation biases. To navigate these waters, I adopt the perspective of a five-star general overseeing a drone center, analyzing the market with precision.
While I anticipate fluctuations, my outlook remains bearish until the VIX hits $12, taking into account both short-term ups and downs. This is a strategy geared towards a relatively long or intermediate-term perspective, focusing on the bigger picture.
Past experiences with mistimed UVXY Long Calls, particularly during the pre and post-COVID periods, have taught me to be wary of recency and confirmation biases. To navigate these waters, I adopt the perspective of a five-star general overseeing a drone center, analyzing the market with precision.
While I anticipate fluctuations, my outlook remains bearish until the VIX hits $12, taking into account both short-term ups and downs. This is a strategy geared towards a relatively long or intermediate-term perspective, focusing on the bigger picture.