VIX futures are probably cheaper than VIX ETFs / options.
Hedge funds as an asset class are meant to have the returns profile you’re talking about, and they’re supposed to achieve this via the sorts of active trades that are generally slightly profitable and become much more profitable in high volatility times. However, it might be the case that the only reasonable HF opportunities are available to high net worth (say >10m usd) -- I’m not very familiar with the space.
I agree with the notion that your option 5 requires real skill. I think if you’re willing to spend the time to be good at that, you should do some simpler trades that are more consistent instead.
Any insight how VIX futures are a better option compared to VIX ETFs?
On the mention of VIX futures , i am actually wary of VIX futures suffering from Contango and getting timing right is crucial. I am not sure how actual volatility practitioners deal with it
“VIX futures in contango” is roughly same problem you mentioned about e.g. VIXY going down 90% “over a market cycle”. My claim is that you’ll lose less to the contango than to the drift in VIXY. If I understand correctly, (I don’t have easy access to the data right now) the VIX ETFs actually hold (dynamic) baskets of options, which means they lose a lot of money to slippage / transactions costs as they trade in and out of those positions.
VIX futures are probably cheaper than VIX ETFs / options.
Hedge funds as an asset class are meant to have the returns profile you’re talking about, and they’re supposed to achieve this via the sorts of active trades that are generally slightly profitable and become much more profitable in high volatility times. However, it might be the case that the only reasonable HF opportunities are available to high net worth (say >10m usd) -- I’m not very familiar with the space.
I agree with the notion that your option 5 requires real skill. I think if you’re willing to spend the time to be good at that, you should do some simpler trades that are more consistent instead.
I agree, Option 5 requires real skill .
Any insight how VIX futures are a better option compared to VIX ETFs?
On the mention of VIX futures , i am actually wary of VIX futures suffering from Contango and getting timing right is crucial. I am not sure how actual volatility practitioners deal with it
“VIX futures in contango” is roughly same problem you mentioned about e.g. VIXY going down 90% “over a market cycle”. My claim is that you’ll lose less to the contango than to the drift in VIXY. If I understand correctly, (I don’t have easy access to the data right now) the VIX ETFs actually hold (dynamic) baskets of options, which means they lose a lot of money to slippage / transactions costs as they trade in and out of those positions.