The $VIX is like the mythological sirens that were said to have lured sailors to their watery deaths with their sweet song. Fewer instruments in trading regularly see daily gains of well into the double digits in percentage points as the $VIX with triple digit returns in mere days not uncommon. Add in the leverage on futures, options or even the leveraged ETFs and some people can’t seem to resist the temptation at taking a shot, similar to the big Power-ball Lottery drawings.

Until you get some experience & find your niche in trading or investing it’s probably best to focus on hitting singles & doubles via trading stocks & ETFs before swing for the fences with highly leveraged or volatile instruments like the VIX with the potential for large, quick gains comes with an equal, if not greater potential for large, swift losses.

Hope you are right. I will follow up with a post to you re the TSX and some Canadian stocks (not looking to buy now but hoping for more downside).

ThankYou, Randy, no problem for me to avoid VIX et al, there’s plenty more to focus on.

Anything is possible but I don’t see anything in the charts that would indicate the selling is likely over. In fact, my read on the charts indicates this is more likely just the early stages of a much larger correction.

Again, anything can happen so I’ll do my best to view the charts with an open mind, looking to cover shorts, hedge or move to a net long exposure if the charts start to indicate that a meaningful bounce or end of the pullback is likely over. I’ll also do my best to i.d. any objective buy points where you might want to add long exposure as I remember you inquiring about that recently. I may or may not join you there but I’ll do my best to point out the levels where the market is likely to see a reaction, which may either prove temporary or lasting.

Exactly. Now try to picture (and I’ve seen it many times before) a visual where the market continues to slide impulsively lower over the next week or so. I think at minimum, QQQ is headed to 126. If it did so in relatively short order (just another couple of bad days like yesterday), that will then have wiped out every single candle (buyer) on the Q’s for the last 1.4 months & a move to my next target around 124.30ish will have wiped out nearly two months of gains.

The reason that I love shorting as much as going long is that during corrections & bear markets, even just quick pullbacks in the market or a stock, it is the norm to see weeks or even months of the gains wiped out in mere days as stocks typically fall much faster than they rise.

I means this in the most sincere way with the best of intentions but if you aren’t an expert on options, I would strongly suggest to avoid them as I can think of fewer, if any, faster path to the destruction of one’s trading account than buying puts or calls without experience or using semi-complex options strategies that limit your downside risk vs. buying a put or a call. With that being said, if I do see any that stand out (I’m assuming that you are interested in broad market index options but let me know otherwise), I’ll pass them along.

Unless you are very experienced at trading volatility, fututres & options, probably best to stay clear of the $VIX tracking ETP’s or VIX futures or futures options. The VIX tracking ETFs, especially the leveraged ones, seems to be very popular among retail investors but they should be called the “Widow Makers”, as from what I’ve heard on this site & elsewhere, they usually prove to be losing trades & quite often, I hear of very large losses.

Volatility can be tough to trade & even more so with trading the broad market, timing is critical. E.g.- You go short the Q’s, even with QID, & hold it for weeks or even months in a market that works it way down gradually in a downtrend marked with selloffs, counter-trend rallies & sideways trading/consolidation ranges & close the position down the road for a nice gain. With the VIX, I’ve seen days where the market is down yet the VIX is flat or down as well & during those counter-trend bounces or even flat markets, the VIX can melt down like a hot knife through butter. Then there’s the decay & tracking error that they suffer over time due to rolling futures contracts, leverage, etc..

Probably better to stick with index shorts until you’ve have quite a bit of experience & knowledge accumulated on how to most effectively trade volatility. FWIW- Call & puts on VIX futures are my preferred trading vehicles on the rare occasions that I trade volatility.