Bullish vs. Bearish VIX Trades


As the markets sighed in relief last week over one fiscal cliff averted, with several more to go, the VIX registered its largest one-week drop ever of 39%. Option trader Greg Loehr of OptionsBuzz.com offers some ideas if the VIX rebounds or heads even lower.

The new year is being brought in with some of the lowest VIX levels in the past two years. Back on August 17, the VIX bottomed out at 13.3. Last Friday the low was 13.64. Granted, Friday readings are understated since option prices are lowered throughout the day to take into account the weekend’s time decay. Even so, the VIX closed Monday at 13.79.

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This is about as low as the VIX is going to go.