/biz/ - Business & Finance

>>16180760
if you're just sort of casually trading it, use whatever. Whenever I'm holding a "hot" instrument like a VIX-etf or calls on one, I'm a bit tense. I'm watching the graph, looking to get in or out of the position pretty tight. I'm not trying to hold too long, and I am trying to squeeze some value out of my sell timing.

Try and pick an instrument with a reasonable volume, but like I said before, when things get nuts you don't know what the actual book is going to look like. "volume" numbers quoted for things like ETFs are a daily volume, but if VIX shoots up 5% in a few minutes, you have no idea if there are going to be bids to get you out of your position with your "full" deserved profit or not. Maybe one day, there are more accommodating books for one of the ETFs after a big move up, the other day there aren't. You never really know what it's going to look like until it happens, and it happens fast, and you have to do the best you can.

But perhaps you are a "serious" big boy investor and not a excitable speculator. Maybe you're just looking to take a position in VIX-correlated instruments to help adjust and formulate a broader, less time-sensitive position (in fact, to adjust the time sensitivity of such a position). In that case you might use VIX etfs or "make" a volatility hedge yourself the old fashioned way. The strategies you use will arise naturally from your overall investment goals, as always.