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Recently I blogged about buying VIX calls when the levels were near all time lows. I am looking again for an entry point to go long  VIX. Looking to buy VIX calls if  VIX level drops below 12.

Currently with the VIX trading at approximately 12.5 the Oct 18th expiration 14 calls are trading at 2.00. This means on expiration day (if you purchased that call now) if  VIX was above 16 you would be profitable.

VIX Spiking

If we could enter a little cheaper when the VIX was below 12 that would be even better. The VIX has been spiking to the 14/15 area about every 4 to 6 weeks over the past several months.

We are now heading into September and October which are traditionally volatile months so I expect the same should be happening again. If you purchase the call(s) look to sell them on a VIX price spike, which can be short lived, so you have to monitor this trade closely.

I have no set profit target, just looking to let the calls be in place to sell at a nice profit when volatility rises.

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Mark Fenton

mark@sheridanmentoring.com

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