Friday, October 24, 2008

Going With VIX Options

Last Tuesday I hinted at adding a pure volatility play to my investment strategy. Now I can go into more detail as to why this is worth doing. Check out this chart of VIX:IND from Bloomberg:

The latest version of my portfolio report at Alfidi Capital shows that I have added VIX options to my toolbox. I recently sold Nov 08 puts on ^VIX at 28 based on my belief that this market will be wild for the forseeable future. The continuing collapse of the hedge fund industry means forced selling will continue for several months.
Nota bene: Anthony J. Alfidi holds short puts on VIX at the time of publication of this commentary.