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Buy VIX or other volatility indicator?

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Down 22% today. I'm pretty sure volatility/nervousness  will return SOME day. Whats the best way to buy/hold/trade VIX for a retail investor? Are there holding costs? 

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I don't think you hold it at all.

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vxx  ***NOT investment advice.***

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stanolshefski said:   I don't think you hold it at all.
  That was my plan wait till  Volatility returns

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Greatness said:   vxx  ***NOT investment advice.***
  leveraged VIX? https://www.etrade.wallst.com/v1/stocks/snapshot/snapshot.asp?sy...

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ignore above. there are holding costs in the usual state of affairs. if there are no holding costs (flat VX term structure) or it pays you to hold (backwardation) those are temporary conditions (historically and intuitively speaking). it will always cost you to hold "insurance" b/c the "insurance" has a value.

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vickh said:   
stanolshefski said:   I don't think you hold it at all.
  That was my plan wait till  Volatility returns

  Good luck with your plan.

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Short volatility as a replacement for being long SPY isn't so bad. But it's a scary ride and you don't want to start it when vol is low.

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VIX is not volatility but implied volatility. And you can't buy it, you can buy ETFs and ETNs that use future contracts that have additional implied costs if there is backwardation or contango.

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These etfs and etns roll futures contracts and thus heavily decay over time. Holding one of these instruments for more than even 1 day is a huge mistake. They are extremely short term hedges for complex massive dark pools of $ and trading algorithms, not for mom and pop.

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The short vix products actually capture the negative roll yield quite nicely. But they blow up periodically when volatility spikes up. Not much different than being long equities, since vol rarely spikes to the upside on indices.

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If you had any reason to have this in your diverse holdings now would seem to be a good time to buy.  Regardless of what lazy investors do they do have to time some contributions (EG ROTH) or re-balances throughout the year.  Nice to do buy ins on the slump or down period.  That aside I haven't see VIX or any volatility fund as a core fund for a portfolio.  So you may use as a fringe hedge with a pretty small amount.  It also looks like you would need to get out of it before the crisis or craze has passed (this could be hours or days).  Gamble gamble gamble.

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Great advice so far.  10 year low today...

. Found this old thread: https://www.fatwallet.com/forums/finance/1091873 

So as a big picture question if VIX or other derivative is not a good option: Are there any "cheap"hedges to someone being long stocks. I definitely don't want to buy an annuity at 40 for safety, but want some downside protection. There's got to be something for a retail investor that's risk averse.

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vickh said:   Great advice so far.  10 year low today...

. Found this old thread: https://www.fatwallet.com/forums/finance/1091873 

So as a big picture question if VIX or other derivative is not a good option: Are there any "cheap"hedges to someone being long stocks. I definitely don't want to buy an annuity at 40 for safety, but want some downside protection. There's got to be something for a retail investor that's risk averse.

  
VIX is not a good downside protection, VIX can and will slide very unproportionally to major indexes. 

Firstly you should note, VIX itself is a calculation. There has been lengthy discussions in the stock thread about this. If you're curious VIX is calculated by SPX outmoney options (S&P 500), I recall it uses the closest 2 and 6week chain.

This being noted, VIX itself isn't a buyable holding as it is an index, you can buy options on VIX which expire Weds. and are cash settled.

Here are the VIX based tradable etf/etn I know of.

VXX: S&P500 SHRTTERM ETN
XXV: S&P500 SHRTTERM INVERSE ETN
XIV: VIX INVERSE SHRTTERM ETN
VXZ: S&P500 MIDTERN ETN
TVIX: 2x VIX SHRTTERM ETN
TVIZ: 2x VIX MIDTERM ETN
VIXY: VIX SHRTTERM FUTURES ETF
VIXM: VIX MIDTERM FUTURES ETF
SUXY: SHORT VIX SHRTTERM FUTURES ETF
UVXY: ULTRA (2x) VIX SHRTTERM FUTURES ETF

I know I am missing a few, but the big thing is if you want to go forward looking at investing is are you looking at the VIX or Futures, there is a bit of a difference. 

Now if you're looking for protection on the downside. I don't know of any inverse etf/etn that don't reset daily, which really make a long term outlook poor. 

Just for disclosure, I hold some VXX currently (50sh), this was post reverse split, share cost was $60 due to options being exercised, this was around brexit time as I had large positions and a few extra calls. Note with that entry, price I am down about 77% I recall vix was about flat as right nowslightly higher maybe 12.2

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vickh said:   Great advice so far.  10 year low today...

. Found this old thread: https://www.fatwallet.com/forums/finance/1091873 

So as a big picture question if VIX or other derivative is not a good option: Are there any "cheap"hedges to someone being long stocks. I definitely don't want to buy an annuity at 40 for safety, but want some downside protection. There's got to be something for a retail investor that's risk averse.

-Bonds
-Gold (physical or ETF) and/or metals miners ETF
-buy long dated put options on indexes as a hedge (these are priced very well right now due to the low implied volatility you mentioned)
-consumer Staples stocks (any of the big food conglomerates), as they tend to do well during recessions

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