Thread by @the_alphatrades

Learn something new everyday:
Did you know that you cannot buy #vix spot and only #vix futures via $UVXY instrument.

🧵👇

Furthermore, this instrument calculates options chain of all #vix contracts on a 30d weighted basis.

From CBOE: calculated by using the midpoint of real-time S&P 500® Index (SPX) option bid/ask quotes...cont

More specifically, the VIX Index is intended to provide an instantaneous measure of how much the market thinks the S&P 500 Index will fluctuate in the 30 days from the time of each tick of the VIX Index.

So the reason you have not seen big moves in the VIX this year is because I'd bet there is someone buying that volatility and compressing it. Because historically you could expect in bear market pukes in #spx500 of -4% drops, VIX would shoot up 15-25 handles in a day.

And this would've been a hedge you could put on. But nowadays, the VIX barely moves on a high volatility day. So your hedge is worthless in this instance.

And good luck hedging with Gold, bonds, or anything else in this environment. See correlations matrix.

Just thought I'd post something that I heard on a #finance #podcast from the man Jack Farley @ForwardGuidance !