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Berger: Why I’m buying VIX call options

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March 07, 2016 S&P 500, call options, cboe, ecb, equities, european central bank, event, events, federal open market committee, fomc, index, options, risk, risks, saxo, saxo bank, saxo tv, saxo tv tradingfloor.com, saxobank, saxobank.com, saxotrader, saxotradergo, saxotv, serge berger, trade idea, trade view, trader, traders, traders tale, trading, tradingfloor, tradingfloor.com, tradingfloorcom, vix, volatility
With upcoming events like the ECB and FOMC meetings posing risks to stocks, Serge Berge has decided to trade the CBOE volatility index also known as the VIX and here’s how.

According to Berger, the index goes inverse with the S&P 500 and a recent bounce in that index saw the VIX falling and it now trades at around 17. With the upcoming central bank meetings and the risk they entail, Berger says he believes it is more risk adverse to buy VIX options rather than shorting stocks.

He is looking to buy VIX May 20 strike calls at USD 2.80 per lot. The stop for is trade will be if the VIX drops to 15 and his target is when it hits 21.