§ 01
| VIX Level | Market Condition | Historical Context |
|---|---|---|
| < 15 | Low fear, complacency | Common in bull markets |
| 15–20 | Normal | Long-term average |
| 20–30 | Elevated concern | Corrections, trade wars |
| 30–50 | Fear | COVID crash, 2008 early stages |
| 50+ | Panic | Lehman Brothers, COVID peak |
§ 02
The VIX has a critical property: it mean-reverts. It spikes sharply during crises but always comes back down. This makes shorting volatility profitable most of the time — until the one time it isn’t, which can be catastrophic.
§ 03
Check the current VIX level in the **Macro** section. Where does it sit in the historical range? If it’s below 15, the market is calm. Above 25, fear is elevated.
§ 04
The VIX is at 12 — near multi-year lows. Is this a good time to buy portfolio insurance (put options)?
§ 05
§ 06
VIX at 35 (elevated). Historically, VIX reverts to mean (~15-20). A trader sells VIX futures at 35. Two days later, market crashes further, VIX spikes to 50. Their loss?
Five questions · AI feedback
Sit with the ideas.
The VIX has been sitting below 13 for several weeks. A portfolio manager decides to buy S&P 500 put options as portfolio insurance. Is this good timing?
Why: