VIX Index Strategy Questions and Answers

I have had a lot of questions regarding the Stock Market Trading Strategy using the VIX Index and I have replied to almost all. However these questions from a FullyInformed Member covers a lot of ground so I thought I would answer them in this article.

Here are his questions in italics and my answers to each follow his different questions.

Investor Questions:

1) On the VIX strategy, I was wondering, since there is no “underlying” on the VIX, if I SELL “10 of the $14 puts” and get assigned, am I buying 1,000 @ $14 and have to “set aside” $14,000 in case I get assigned? Or, how does that work since there is no underlying? I was wanting to plan ahead and have the proper amount of money set aside. I don’t think that is the case since there is no underlying. I’m just referencing “SELLING THE NAKED PUTS RIGHT HERE”.

The VIX Index is a cash settled ETF. In other words there are no shares. If you sell 10 of the $14 puts and the VIX Index ended up at $13 ….. To read the rest of this VIX Index strategy article FullyInformed Members can login directly through this link or Members can sign in here. Non-members can join here.