A VIX play for news

Look what happened to VIX right after December's CPI release. Equity and bond markets reacted positively, so VIX tanked... but then bounced most of the way back by 12:30.

Traders who are long and want to hedge news could try this play:

  • Set stops for their longs and buy an appropriate amount of VIX.
  • If the markets tank, expect VIX to advance strongly, and take a profit as soon as you can.
  • If the markets rip, wait for VIX to dump and bounce and sell the bounce.

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