4 Ways to Short Volatility - Ranked from WORST to BEST!

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Brent Osachoff , volatility trading strategies, VTS , VTS options, volatility trading , Volatility ETPs, options trading , investing , stock market, VIX, VXX, UVXY

[invictus_training_systems]

There's not many channels where I immediately like a vid when it loads but your shit is that good. Thanks again

[VixCrush]

Wow. They have you in a padded room now I see :) Great outline of some ways to short the Vix.

[George-pixs]

When following your #1 method, long puts on VXX, you're exposed to the whims of the ETN issuer (Barclays) if they change the contract terms again - as they did when they reduced VXX from 1x levered to 0.5x levered without warning. With expected vol of the underlying cut in half overnight, you can understand how long option holders on VXX had their positions all but wiped out just because the issuer decided to change the rules. There was no recourse for option holders. Avoiding the ETNs and shorting VIX futures directly is more complicated, but you're not at the mercy of a 3rd party who's already demonstrated that they'll change the rules if they want.

[ffl-protectwhatmatters]

Excellent stuff Brent!!! I tend to fade TVIX on spikes but haven't done it recently. This was very informational and helpful!!

[lo]

Excellent video Brent!

Can you comment on shorting UVXY / VXX while using a protective call? Is there enough profit to justify the cost of constantly rolling hedging calls and paying a 9+% margin short borrowing rate?

[randylatona]

Thanks for the video. Do you think buying VXX puts is still profitable when IV is sky high like it was Feb 18? Seems like there was so much premium built into the options that there wasn't a great return.

[jimhayes]

Your so through. I enjoy your daily vts emails.

[kamran]

If you're buying puts, wouldn't it be at a more expensive premium if the vxx and vix are at high levels? I'd say short spreads would be better for me because you're taking more premium up front. Love the channel!

[FunnyVidzz]

Hey Brent, great video, thanks! I had a question regarding high IV trades but you already answered it in a previous comment so koodos. You say shorting VXX is the worst strategy of them all due to its incredible upswings and potential for infinite loss. Is it not possible to protect yourself using a stop loss? I know they aren't perfect and it could gap right past it but you're still only looking at mid double digit losses every few years.

[jeremiahmiller]

Brent brand new sub. I’m sorry this is a completely noobish question as I’m brand new to shorting volatility. During black swan events when the vix spikes you like to buy puts on VXX as a high probability trade with defined risk correct?

[joannahuc]

Thank you for great content. I am binge watching your videos now. Can you explain why buy vxx puts rather than .vix puts. Thank you.

[TomerHY]

❤Amazing i like the way you explained things… you are a pro

[cdawg]

Now that the stock mkt is in crash mode, since in Dec 2019 when this video was posted, I wonder how close we are to seeing a bottom. SPY and the ES look to be honing in on the 200 mda on the long term 20 yr weekly chart. The one year daily has been ignored by the free fall. TVIX is doing exactly what you talked about in your video as we speak. 148 is what I saw today for a high with TVIX . I think shorting volatility if and when the 200 mda gets tagged by SPY and the ES could be a time traders around the globe may be thinking the same thing.

[joeyd]

Does EXIV offer better downside protection over the failed XIV because one (EXIV) is an ETF and the other (XIV) is an ETN (exchange traded note)?

[investor.z]

In this video you state that your favorite method of shorting volatility is longing VIX put options (well VXX to be exact). But in another video you state "Here's why VIX Put Options don't work" and say that longing them does not work. Can you elaborate?

[brianlevi]

Is there a link where I can learn and understand your vocabulary?

[jiaminzhu]

And what do you think about selling VXX naked call? Would you consider it outrageous or do you think it is easier to roll so it is also reasonable?

[erandeser]

Do I understand well ? This is just trading an option in vxx as in any other stock. Nothing to do with hedging a portfolio ?

[temujingeng]

Brent, one thing you probably want to mention is, if the VIX short contract swing around some position for couple weeks, you are going to lose all of your premiums that you paid for your options:)

[NicoDurand]

I didn't understand how to implement the "best" way: is it simply buying long term puts on VXX or UVXY?