What is the volatility index VIX?
The VIX index is the CBOE’s Volatility Index, which reflects the market’s expectation of 30-day volatility, based on S&P 500 index options. You cannot buy or sell the VIX itself, but you can trade it via instruments like options and futures.
What are the VXX and XIV?
As an alternative to trading futures or options over the VIX index, there are two Barclays Volatility Exchange Traded Notes (ETN) called the VXX and XIV. These ETNs can be traded like stocks on a listed exchange and offer a good short-term trading vehicle to gain exposure to movements in the volatility index VIX.
The VXX and XIV are inversely related. While the VXX trends upwards when volatility increases, the XIV trends upwards when volatility decreases.
What is the VXX Trading System
The VXX Trading System was developed by Optionvue Systems International. It is not an Option trading strategy as such, but a strategy for trading the two Barclays’ Volatility ETNs, the VXX and XIV. In 2016 OptionVue developed a new proprietary indicator for their VXX Trading System, the Yates VXX Indicator. The trading rules for this indicator are very simple and have resulted amazing trading returns! (See the VXX Trading System Performance page.)
Watch this Free Presentation
Watch this presentation in which Paul Wise explains the VXX Trading System and its advantages: