Hello, dear All!

I`d like to ask the experts in the area.From my observations it seems like with the VIX below 16, indicies aren`t sellable, meaning the makret is just keep pusshing upwards with little pullbacks.With the value above 16, the indicies are tradable both short and long, as there`s enough range to trade with the value above 16.

The question is, is my observations correct and if someone has more reliable data on the subject and willing to share and educate?

Thanks for reading this and good trading to All!

flamboyant 

Hello, dear All! I`d like to ask the experts in the area.From my observations it seems like with the VIX below 16, indicies aren`t sellable, meaning the makret is just keep pusshing upwards with little pullbacks.With the value above 16, the indicies are tradable both short and long, as there`s enough range to trade with the value above 16. The question is, is my observations correct and if someone has more reliable data on the subject and willing to share and educate? Thanks for reading this and good trading to All!

If I'm not mistaken @suko trades VIX or at least knows about it.

xplorer 

If I'm not mistaken @suko trades VIX or at least knows about it.

Ok, cool.Thanks!Would love to hear from @suko!

p.s. to clarify, i`m not trading VIX directly, but use it as a gauge to trade indicies.

You might want read my diary in the Elite section.

Lady Vol's Primer: Trading Volatility Journal Trading XIV, VXX, UVXY, VIX options, VX futures, also 2035.T (NKVi), and other products. This journal is dedicated to My Lady Vol, the Goddess of Volatility, an exalted being who spends most of life in deep slumber and who sometimes, with little warning, …

I think it should be a great introduction to the subject for you, as my thinking and learning about Vol evolves considerably over the time of the diary.

As for VIX and indexes, note that you also have VXN for Nasdaq and RVX for the Russell, in addition to VIXes for foreign markets and commodities, gold, oil and bonds.

• First and foremost you must constantly monitor the shape of the VIX futures term structure. All VIX questions lead to the term structure. VIX Term Structure Also, drill down through the articles on Six Figures Investing https://sixfigureinvesting.com/
  
• Another important thing for your purposes would be to keep an eye on the ratio of VIX to VXN. Sometimes there are interesting divergences that you can spot for mean reversion trades.
  
• Yet another thing to keep an eye on is VVIX, which pretty much only the pros watch. It tells you how expensive the VIX options are, and its trend is very indicative. Learn to read it.

suko 

You might want read my diary in the Elite section. Lady Vol's Primer: Trading Volatility Journal Trading XIV, VXX, UVXY, VIX options, VX futures, also 2035.T (NKVi), and other products. This journal is dedicated to My Lady Vol, the Goddess of Volatility, an exalted being who spends most of life in deep slumber and who sometimes, with little warning, … I think it should be a great introduction to the subject for you, as my thinking and learning about Vol evolves considerably over the time of the diary. As for VIX and indexes, note that you also have VXN for Nasdaq and RVX for the Russell, in addition to VIXes for foreign markets and commodities, gold, oil and bonds. First and foremost you must constantly monitor the shape of the VIX futures term structure. All VIX questions lead to the term structure. VIX Term Structure Also, drill down through the articles on Six Figures Investing https://sixfigureinvesting.com/ Another important thing for your purposes would be to keep an eye on the ratio of VIX to VXN. Sometimes there are interesting divergences that you can spot for mean reversion trades. Yet another thing to keep an eye on is VVIX, which pretty much only the pros watch. It tells you how expensive the VIX options are, and its trend is very indicative. Learn to read it.

Thanks for your reply, @suko!

What about the VIX value itself?Is my point correct, that the value below 16 isn`t "sellable" for the indicies and what fluctuates below 16 don`t matter for the sell side and you just simply buying pullbacks?

flamboyant 

Thanks for your reply, @suko! What about the VIX value itself? Is my point correct, that the value below 16 isn`t "sellable" for the indicies and what fluctuates below 16 don`t matter for the sell side and you just simply buying pullbacks?

You saying one should not sell SPX futures with VIX below 16?　I think that's exactly the zone in which a lot of semi-smart speculators and retail like to start getting long vol.

It's a stupid trade.

Once in a while you hit a home run.

Most of the time the options and futures decay eat you alive.

Net net you lose, that's why it's stupid.

That being said, there are smart ways to do it, using options, and if you learn how you can sometimes get your juice for free.

suko 

You saying one should not sell SPX futures with VIX below 16?　I think that's exactly the zone in which a lot of semi-smart speculators and retail like to start getting long vol. It's a stupid trade. Once in a while you hit a home run. Most of the time the options and futures decay eat you alive. Net net you lose, that's why it's stupid. That being said, there are smart ways to do it, using options, and if you learn how you can sometimes get your juice for free.

The evidence shows the opposite.As you may see from the charts attached the VIX, for the most part, was below 16 during the 2017-18 period.When you consult the DJIA chart next, you`ll notice that the DJ was heading up like battery bunny.Now, how would you`ve sold DJ during that period?

As I said it's a stupid trade unless you use a pro technique. The way you phrase the question indicates to me that you will need to roll up your sleeves if you want to do the following:

The way we trade that is with options ratio spreads or pairs trades to finance the long vol with short vol positions. Such as VIX 1x2 backspreads. You can just as well do that with SPX zero premium trades.

The strategy is you use the table stakes that come from the short vol to allow you to stay in the game long enough for your long vol trade to finally pay off.

This is the way that the "50 Cent" and the "VIX Whale" traders did it on 2017 and 2018 leading up to Volpocalypse. Albeit they were using VIX options not SPX.

suko 

As I said it's a stupid trade unless you use a pro technique. The way you phrase the question indicates to me that you will need to roll up your sleeves if you want to do the following: The way we trade that is with options ratio spreads or pairs trades to finance the long vol with short vol positions. Such as VIX 1x2 backspreads. You can just as well do that with SPX zero premium trades. The strategy is you use the table stakes that come from the short vol to allow you to stay in the game long enough for your long vol trade to finally pay off. This is the way that the "50 Cent" and the "VIX Whale" traders did it on 2017 and 2018 leading up to Volpocalypse. Albeit they were using VIX options not SPX.

Sorry, but i don`t know nothing about options and backspreads, for that matter.