Who Should Use VIX Products?

Everybody trading the markets should look at tradable VIX products. At least those who consider VIX a useful indicator should pay attention. VIX itself tells a very narrow picture. It’s one time frame (30 days) on options on one index (SPX). If nothing else, a gander at VXX and VXZ will give you a broader perspective into the volatility markets. Perhaps there’s some divergence, such as September 2011 when VXX and VXZ saw relative strength versus VIX.

As to actually trading them, keep in mind they’re designed as trading products. A simple buy and hold does not work. VIX has stunning pops and endless drops, but ultimately, mean reverts over longer time frames. VXX, and to a lesser extent VXZ, ultimately underperforms VIX.