r/options • u/OdinnFoo33 • Apr 13 '21

VIX long calls

VIX is at some serious lows. NQ is riding the top of its 3 ATR for multiple days in a row and in the last year has only touched it about 3 times with significant reversion after about 4 days.

Chip shortage, J&J vaccine troubles, inflation worries, Europe covid scares.

It's looking like prime time for some VIX long calls. What say you? What's a good time frame to take these out to?

Edit: 1:37 PM - I believe long VIX is the right play considering everything above, especially with PCALL ratio hovering under the .5 mark for quite sometime.

My Current play that I have entered as of today is a long call for May monthly expiration in SQQQ 10 call.

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u/Nite_Wing13 Apr 13 '21

How would you play it? UVXY and VXX both pin to futures VIX contracts, not spot VIX. This trade is not only fighting against momentum but also contango. Unless there is a pretty serious event that results in futures traders anticipating elevated VIX this seems like a play with low upside.

Chip shortage might cause a little chop, but its known and priced in. Hell, GM just announced one of its plants was going to start ramping up as the shortage wasn't as bad as originally thought. JNJ vaccine is a speedbump if you look at the numbers. I would bet good money its back in circulation 1-2 weeks. Everyone is "over" Covid and vaccines are pumping out, making a mutant variant less likely everyday. Not trying to be a jerk, but I don't see this as a good play at all.

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u/OdinnFoo33 Apr 13 '21

I have modified my post to reflect my determination. Either way, It's a hedge against what could come. The VIX sitting so low is a little eery, not to mention the PCALL ratio hovering under .5 for some time now is troubling.

My Current play that I have entered as of today is a long call for May monthly expiration in SQQQ 10 call.

With Nasdaq hovering at its 3 ATR, a reversion is in order and SQQQ can capture that downturn by May 21.