The large volume of hedged assets through options on VIX has proven to be a win strategy. The biggest drop of the SP500 since September ended the long rally, and this significantly increased the VIX - index of fear. Sell Off, which started quite sharply during the US session yesterday, caused declines in Asia and Europe and volatility has picked up significantly.
The VIX jump led to a record number of Call options, and if compared to Put options, they exceeded three times.
Over the past five months, VIX and SP500 have risen in unison, something that has not happened since 1996. here.
Let's look at the statistics.
In the past months, which are accompanied by profits of SP500 and VIX together, lead to a 72% rise in the stock market. In other words, the behavior of VIX and stock indices indicates that the correction is rather short-term.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
And here, You can find how to trade VIX to protect our long positions
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