/biz/ - Business & Finance

>>51600647
>VIX couldn't stay above 30 despite the "apocalypse"

i truly honestly don't know why people don't simply use VIX as a buy signal at 30+, it's truly baffling to me.

so, i just wanted to reiterate this point again with you fucking retards concerning volatility:

here is a weekly chart of the VIX over the past 20 fucking YEARS. notice anything? here, i drew some fucking lines for you. now if you want some REAL fun, match the dates when the VIX hit those levels with the SPY and note how well it called the relative bottom of what were likely those "dips". especially 2008 GFC and 2020 covid. pretty neat, huh? 10 is really the baseline of the market for volatility, although 12 is more reasonable. that said i still don't believe you should ever long volatility because of in contango, meaning that due to decay the shit you can actually trade that follows the VIX is rigged to always go down forever, instead of just reverting to the mean, but if you WERE to do such a thing, you'd probably want to be looking at doing it around a VIX of 12 (or if you're really ballsy, around 20 during these post-covid spike times). the absolute lowest the VIX has ever gone (dating back to 1985) has been 8.56, on 11/27/17.

still, as you can see, luck is much more in your favor for shorting volatility spikes rather than trying to go long on it. they never last long, most spikes only go to 30-50, 35 and 45 being good levels specifically. as long as you can use position sizing to handle not getting margin called if a black swan happens (which, the last 2 were 12 years apart, and before that there's only black monday, 1987, which can't ever actually happen again because of laws they put in place specifically because of it, like circuit breakers). so for the majority of your life there will be no VIX at >80, and if it ever DOES do that again, guess what bitch, that's the bottom, put all your money in. look at how it timed the bottom of the covid crash if you don't believe me. even when it happens, if you were short you could just hold, even add to your short, because it is guaranteed to go down again as long as you hold, and can handle the margin.

so, i just wanted to reiterate this point again with you fucking retards again concerning volatility:

here is a weekly chart of the VIX over the past 20 fucking YEARS. notice anything? here, i drew some fucking lines for you. now if you want some REAL fun, match the dates when the VIX hit those levels with the SPY and note how well it called the relative bottom of what were likely those "dips". especially 2008 GFC and 2020 covid. pretty neat, huh? 10 is really the baseline of the market for volatility, although 12 is more reasonable. that said i still don't believe you should ever long volatility because of in contango, meaning that due to decay the shit you can actually trade that follows the VIX is rigged to always go down forever, instead of just reverting to the mean, but if you WERE to do such a thing, you'd probably want to be looking at doing it around a VIX of 12 (or if you're really ballsy, around 20 during these post-covid spike times). the absolute lowest the VIX has ever gone (dating back to 1985) has been 8.56, on 11/27/17.

still, as you can see, luck is much more in your favor for shorting volatility spikes rather than trying to go long on it. they never last long, most spikes only go to 30-50, 35 and 45 being good levels specifically. as long as you can use position sizing to handle not getting margin called if a black swan happens (which, the last 2 were 12 years apart, and before that there's only black monday, 1987, which can't ever actually happen again because of laws they put in place specifically because of it, like circuit breakers). so for the majority of your life there will be no VIX at >80, and if it ever DOES do that again, guess what bitch, that's the bottom, put all your money in. look at how it timed the bottom of the covid crash if you don't believe me. even when it happens, if you were short you could just hold, even add to your short, because it is guaranteed to go down again as long as you hold, and can handle the margin.