Volatility on the Rise?

Published on
May 21st, 2018
9 minutes

Volatility on the Rise?

Trade Ideas ·
Featuring Max Wolff

Published on: May 21st, 2018 • Duration: 9 minutes

Max Wolff, chief economist at The Phoenix Group, makes the case for betting on rising volatility. He explains the catalysts and lays out his trade in this interview with Justine Underhill. Filmed on May 17, 2018.


  • sb
    siddharth b.
    22 May 2018 @ 09:04
    no. just no. the contango will kill us all... Also a post below mentioned backwardation, i'd wager that backward VIX curves is a buying opportunity alright, for the SPX and not the VIX ...
  • SH
    Syed H.
    22 May 2018 @ 00:26
    Buy a grand of $UVXY and wait for it to pop?? Nooooo thanks. Just short $TSLA and ride the Crude train to profitville.
  • AD
    Anthony D.
    21 May 2018 @ 20:51
    Max, With the decay, what is the "Safe" time frame for a VXZ position, a few days, a week or two?
  • NT
    Nicolas T.
    21 May 2018 @ 20:08
    Good luck winning money with that strategy. VIX today's at 13.3, August Future is at 15.3... That's already 2 points that you're losing only by waiting. November (6 months) is at 16.45 so you'd be risking 3.15 (16.45-13.3) to win 1.55 (18-16.45) : that's not the best risk/reward, even if the probability were in your favor… I'm not saying VIX/volatility will stay low, but you'll need to have an almost perfect timing to make money on this. One possibility would be to wait until the board is in backwardation again, so the term structure works in your favor… Anyway, I would love to hear more about volatility trades, but this is a simplistic trade idea and a lot of factor were left out.
  • SB
    S. B.
    21 May 2018 @ 12:17
    I agree, but can't you just buy long-dated options, for example, SPY/SPX, to capture the volatility?
    • VP
      Vincent P.
      21 May 2018 @ 12:59
      Yes you can but they trade by appointment (thin and wide spreads), so you pay up to structure your position. This guy mentions getting in and outof these positions due to tracking errors or outright upside trends that kill you twice as much. He's right. On the other hand, you can try $5, $10, $20 put spreads and wait or even try pairing VXZ (long) with VXX (short) dollar neutral or ratio. Done 'em all. Personally, I prefer to drift to where the action is most opportunistic like FX vol, Russell, NASDAQ while establishing some kind of longer term S&P downside movement. Just my two cents.
    • MK
      Michael K.
      21 May 2018 @ 19:09
      I disagree Vincent - Longer dated SPY are extremely liquid and tight on the screens. This trade idea is very touchy freely, hard to disagree with anyone ever saying “if vol is below x it’s probably gonna go up one day and higher than y it’ll be lower one day.” This topic deserves a richer survey and volatility ends up confusing 99% of non professional market participants without deep self education.
  • SS
    Sam S.
    21 May 2018 @ 16:27
    Hey Max----any further discussion of the automotive sector? Rapid fire info on the VIX---thanks!