Again, a small position. The beauty of this position is that it's not neccessary a bet that the market will rise but rather that volatility will subside. So, even if the market is in the process of topping out or rolling over you often see the VIX show relative weakness. For example, when the market rolled over in Janurary it had a brief rally near the end of the month. That resulted in the VIX tumbling to the lows it made at the peak of rally in early January. Thus, the market had made a lower high while the VIX retested it's low. Sometimes you see the VIX actually make a lower low in these cases. Thus, anyone who got caught buying VIX puts near the Janurary highs had a chance to escape with a small loss 3 weeks after the market topped out and rolled over (due to the time premium decay).
I bought the July puts to give me plenty of time for my VIX 30 target to get hit. Even if 875 was the high of rally, its quite likely it will be retested to fill today's large gap eventually.
I doubt the bulls will be able to recover by the end of the day however. This looks like one of those gap down and flat line days. I suspect the best the bulls can hope for today is a close to about the 850 level.
I likely won't be posting as much in the next little while because I need to focus on studying for the CFA level 3 exam. This stuff is addictive and is taking up too much of my time.
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