Buy the Vol but don't buy the Vol

So as 2017 gets off to a raucous start let us compare and contrast with the start of 2017.   VIX was around 19.50 at the beginning of 2016 and quickly moved to the 30s as traders let the potential calamity of rising interest rates and possible Chinese meltdown rule the day.  We got the rate rise but China is still chugging albeit at exactly the same spot it was last year.  The only thing really different is that there is a new man in the White House come Jan 20th.  VIX is 11.85 going into the transition.

Livevol for Lightspeed

Volatility is cheap everywhere with VVIX near the lows of the year.  It can get a bit cheaper but not much.  Now is the time to buy juice in the VIX but if you straight buy calls you will probably lose all your money.  Buy strangles instead and if you want to learn how to do it right take our Vol Master Class.

The Trade

Buy ITM VIX Feb strangles and sell the puts when they pay for the position.

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Disclosure- multiple VIX and VXX  positions in the fund I help manage, Karman Line Capital, and in the PA.

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