Leaderboard

We need to see how the prices are. If the stocks are volatile, the prices might already reflect that, and if IV comes down and the stock doesn't move, the trade will suffer. I still prefer to trade expirations that are supported by upcoming earnings.

Looking at a long term chart of VXX, buying puts or put spreads certainly works out well historically as that current month to next month futures swap works in your favor most of the time. I was thinking of placing a longer term trade using VXX options 6 months out and buying ITM puts or a OTM put spread. I'm also expecting VXX to do a reverse split in the near future as its price is getting too low. Regarding shorter term trades for the VIX to drop after it rises for a few days in a row. I love VXX diagonals for this where I'll short a slightly OTM put expiring in 5-10 days and buy a slightly ITM put the next option series out. You can use farther dated options if you like, but since the VIX dropping back down usually happens fairly quickly I like the shorted dated ones. If the VXX works against me and continues to go up, I'll turn the trade into a calendar. If the VXX drops as expected, I'll close the trade near the short leg expiration.

The VXX is a product designed to go to zero over time (as are several other VIX derivatives). I think this is because they have to roll over the futures at a loss. They can prop up the spot price by reverse splits - but market value wise - its going to zero. Crazy designed product. But apparently good for very short term trades