How to Utilize the $VIX as a Hedge
While the 
VIX is a volatile index by itself, containing derivatives that can be fun to trade individually; it can also be used as a valuable hedge against a range of portfolios. While I had a tech heavy portfolio the last month and a half, I took tremendous short term gains anywhere between 10 and 15%. While holding the 
VXX ETF to mimic movements of the VIX, I used this derivative to hedge against sharp downfalls in this NASDAQ.
Over the course of tech making a quick run, the ETF I held took losses of around 20%. This is why it is vital to take a holding relative to other positions - I usually do 1/3 position compared to fulls in my portfolio. This way the losses only really amounted to ~6.5% compared to a full position. Today on 6/19, a couple days after I liquidated all my tech positions [
FB, 
AAPL, 
SNAP, 
MOMO, 
CRM] (still holding 
NVDA), the NASDAQ took a hit and the VXX ETF is up 8.2% currently. This spike has erased losses to -10% for the position alone (~-3% to a full position) and has actually made me net green for the day even after suffering losses of 2.5% on NVDA.
Even though theVIX is extremely risky by itself, I do think it contains great value as a hedge if utilized correctly.
VIX is a volatile index by itself, containing derivatives that can be fun to trade individually; it can also be used as a valuable hedge against a range of portfolios. While I had a tech heavy portfolio the last month and a half, I took tremendous short term gains anywhere between 10 and 15%. While holding the VXX ETF to mimic movements of the VIX, I used this derivative to hedge against sharp downfalls in this NASDAQ. Over the course of tech making a quick run, the ETF I held took losses of around 20%. This is why it is vital to take a holding relative to other positions - I usually do 1/3 position compared to fulls in my portfolio. This way the losses only really amounted to ~6.5% compared to a full position. Today on 6/19, a couple days after I liquidated all my tech positions [
FB, AAPL, SNAP, MOMO, CRM] (still holding NVDA), the NASDAQ took a hit and the VXX ETF is up 8.2% currently. This spike has erased losses to -10% for the position alone (~-3% to a full position) and has actually made me net green for the day even after suffering losses of 2.5% on NVDA. Even though the
VIX is extremely risky by itself, I do think it contains great value as a hedge if utilized correctly.
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