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.
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.