By Lawrence G. McMillan
Volatility and the stock market normally move in opposite directions. But occasionally, the relationship between $VIX, $VIX futures, and the S&P 500 becomes distorted.
When that happens, a unique hedged options strategy can emerge.
The $VIX / $SPY strategy combines volatility options with SPY options to potentially benefit from both volatility mispricing and large market moves.
With volatility starting to stir again, this setup may be forming once more.
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