Alright, so I don't play on the stock market. I don't have a brokerage account. I don't know anything about trading regulations for individual investors, nor it's implications on taxes.
So... Talk to me like I'm 4 years old, please.
Now, the question. From what I understand, market is crazy volatile right about now. From what I understand also, such volatility cannot last forever. Hence the question: what prevents me from opening an online account today, selling a ton of VIX, and cashing in a couple months down the road, when it's back down to normal levels?
There's a lot of questions I don't know the answer to...
Can you even trade volatility index as an individual investor? (ETrade has charts for VIX, and buy/sell buttons, so it would seem yes, but for some reason, charts show 0 volume for a while, so it would seem no...)
Are there liquidity issues I need to worry about?
Are there some sort of regulations that say I cannot have the entire "portfolio" comprised of a single short position?
Anything else I didn't think about?
Some enlightening answers would be appreciated, because it seems like easy money, too easy to be true.
So... Talk to me like I'm 4 years old, please.
Now, the question. From what I understand, market is crazy volatile right about now. From what I understand also, such volatility cannot last forever. Hence the question: what prevents me from opening an online account today, selling a ton of VIX, and cashing in a couple months down the road, when it's back down to normal levels?
There's a lot of questions I don't know the answer to...
Can you even trade volatility index as an individual investor? (ETrade has charts for VIX, and buy/sell buttons, so it would seem yes, but for some reason, charts show 0 volume for a while, so it would seem no...)
Are there liquidity issues I need to worry about?
Are there some sort of regulations that say I cannot have the entire "portfolio" comprised of a single short position?
Anything else I didn't think about?
Some enlightening answers would be appreciated, because it seems like easy money, too easy to be true.
Comment