VIX Swing Trade Strategy

25 Nov 2019

The swing trade logic in VIX focuses on long term historic price action. There is always going to be volatility in the market and the "bottom" is historically between $11.50 - $13.50. When the VIX drops below $13.50 we would want to go long with an options spread (such as the VVS options strategy) and when the VIX rises above $24.50 we would want to go short with an options spread (such as a credit spread).

We can also run a skewed Iron Condor when the VIX is below $13.50 with the same logic: skew the Iron Condor with the "risk" on the low side and a "breakeven" to the top side. This allows us to profit from a "sustained" low VIX while also protecting our trade from a top-side breakout. We do not need to protect our trade from a "downside breakout" and we can set the breakeven on the bottom near the $11.50 range.

VVS - unlimited top-side profit potential by developing a call debit spread with an added put option to finance our trade.
Skewed Iron Condor - "status quo" capped profit potential with "top-side" breakout protection
Bearish Credit Spread - Call Credit Spread focuses on selling into strength after a spike in the VIX, leaning on drag and time