Buying a VIX Call
Example: VIX Index 32.12
October VIX Futures 30.10
Outlook: You are bullish on the VIX Index and expect it to rise over the next six weeks.
Possible strategy: Buy 1 VIX October 35 strike call @ $2.65
Potential Profit Outcome Examples:
- Breakeven = Strike Price + Premium Paid
- Breakeven = 37.65
- Maximum Loss = Total Premium Paid
- Maximum Loss = $265
Summary: Consider purchasing a VIX call if you anticipate a rise in the VIX. Have a timeframe in mind to realize your forecast. Risk is limited to the total premium paid. Profit potential is theoretically unlimited.