⚡️ VIX pops 20 % — Is it finally hedge-time with VIXY or UVXY?
The Israel–Iran flare-up jolted the VIX from 13.8 to 16.5 — its first >18 % jump since April. The CNN Fear & Greed Index is still sitting at 61 (“Greed”), a classic cocktail for complacent longs.
🧐 Why this spike matters
1. Compressed volatility all year (VIX < 15 most of Q2) leaves positioning skewed to short-vol trades.
2. Dealer gamma flips around VIX ≈ 17; option desks go from net sellers to net buyers of vol, amplifying moves.
3. Macro landmines ahead: May CPI (tomorrow) + FOMC dots. A surprise on either can push VIX through 18 fast.
🏹 Choosing your weapon
VIXY (1× long)
• Lower decay, gentler ride.
• Best for multi-week hedges or portfolio ballast.
UVXY (1.5× leveraged)
• Pops harder on day-one spikes.
• Bleeds fast when vol mean-reverts — think hit-and-run, not buy-and-hold.
Alternatives
• SPX put spreads (cheaper theta than outright puts).
• Call spreads on VIX futures if you want defined risk.
📊 Trade map I'm running
Starter VIXY position at 16 handle, targeting 19–20 into CPI/Fed.
UVXY 18 calls (Jun 28 expiry), cost 0.60 — plan to flip if VIX > 18 or theta erodes 40 %.
Hedge decay by writing UVXY 30 calls against any pump > 25.
⏳ Exit rules
Close 75 % of exposure once VIX taps 20 or retraces to 15.
Roll remaining hedge only if macro risk remains elevated (e.g., hot CPI + hawkish dots).
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