Updated: May 2, 2019
As volatility traders, one of the things that interests us most are those rare days when the VIX Index goes crazy and spikes 30% or more in a single day. Catalysts can vary from bad economic data to surprise policy decisions from the Fed. It can be from government incompetence like we saw during the government shutdown, or exchange technical issues and high frequency trading gone awry like the flash crash. The cause could be a natural disaster or God forbid, a significant terrorist attack.
Regardless of the reason one thing is certain. The VIX can and does spike on occasion and it will happen again, so as always risk management and preservation of capital are paramount for all those who trade volatility and volatility related products.
February 5th, 2018 was the largest VIX spike in history @ 115.60%
We’ve been extremely successful in navigating these VIX spikes because of our direct focus on safety and risk management. Learn more about how our VTS Tactical Volatility Strategy has performed during the biggest drops in the XIV ETN here.
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