T O P
WOW_SUCH_KARMA

Volatility is mean-reverting, meaning after a spike, there is inherent downward drag even if the market remains flat, though this does not guarantee a flat $SPX day = flat/down VIX day. Options are priced accordingly given that the expectation (not guarantee) is that $VXX goes down. Probably should stay away from VIX-related tickers until you understand how it works. It's a quick way to get scorched.


perfectm

I agree with everything you said, plus I think VXX has additional drag as an ETF that tracks a future as it's underlying so it needs to constantly be moving from front to back months which drag it down further.


Desert_Trader

There is TONS of premium there. It's at 155 IV. But it's only a.$25 asset so the resulting moves are on the single digits. Not much $ premium.


lexel_ent

You are using options on ETF that consists of futures on volatility index (options). It is like having sex via zoom with 3 condoms and a hazard protection suit. Why not trade VIX options directly? VXX is a good instrument for accounts that can not trade options but want to hedge.