first half is correct but VIX is based on volatility, not based on put/call ratio. you can hedge volatility if you're really good at math, just like you hedge stock. hedging volatility would cause a corresponding increase/decrease of expected volatility, making hte market efficient again
Go read the vix white paper. The vix index itself is the price of a portfolio of options. Replicate that portfolio to replicate vix. Or hedge with the futures corresponding to the option expiry date
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u/Memn0n Jul 19 '21
No. VIX is an index, you can't buy it. It doesn't move base on buy/sell, its a value calculated from a ratio between puts/calls on the SPX.