How to profit from financial armageddon
November 22 — Investors are worried about a myriad of economic issues today, and this shared anxiety is being reflected in the so-called 'Fear Guage' a.k.a. the VIX Index. Beginning in August, the VIX spiked from the 15-20 area, to the 40-45 area, and it has remained at this elevated level ever since.
Investors can't buy the VIX index /quotes/zigman/2766221 VIX +0.03% directly, but there are other ways to take advantage of this heightened volatility. One way is to buy call options on the VIX index. The problem with this strategy is that options are a 'wasting asset' with a relatively short shelf life. This means that you have to be right about the direction of the VIX index itself, AND the timing of the move. Read more.
