Wednesday, October 29, 2008

Hedge with VIX?

The VIX has me a bit nervous because it is higher now than it ever has been.

Wouldn't it be nice to add a VIX ETF to your portfolio? The last time I checked into this, VIX is a tradable futures contract, but it doesn't quite act the same as the index. Perhaps selling options would be a good way to mimic the VIX. I've been thinking about a strategy where I would sell strangles or straddles on the SPY, and rolling them every so often so the market doesn't penetrate one side. I haven't thought this all the way through, though. Any opinions?

No comments: