Comment by terminalshort
1 day ago
The same financial products are used in both gambling and smart investing. The canonical example here being options. And the restrictions on what the public can and cannot invest in are complete bullshit. You can't buy shares in a series A startup because that is deemed to be too risky for anyone who is not an "accredited" investor ("accredited" here literally means rich). But anyone who wants to can bet on sports, go to a casino, or buy a 2x levered VIX ETF.
>or buy a 2x levered VIX ETF.
Which isn't even tied to the spot price of VIX on a daily basis.
So buying VIX as a hedge against black swan events (or Donald Trump's stupidity) is a losing trade, which is wild to me.
It's not tied to the spot price of the VIX because there is no spot price. It's a third order calculated quantity based on options pricing. Not that anyone who gambles on that ETF knows that.