We all know the VIX, RVX, VXN and all the volatility indicators to watch...but did you know that you can trade options on them? If trading vol is a bit too esoteric for some, you can always trade any major market. If watching the VIX, trade the s&p's.
For instance....
I went short a put spread into the close last night on SPY because of two things...one, we built a phase 1 after 2 days of down action, so an upmove was called for to relieve some exhaustion. And to put the icing on the cake, we had this chart:
Any candle chartist will tell you...GO SHORT this chart! A doji at a solid resistance area.
Well, when the VIX goes down, price goes up. By going short a put vertical I was in essence buying the SPY with limited downside (limited upside potential, too) to worry about. So far, so good.