Retail investor: VIX is spiking so I'm not touching anything until it calms back down.


Me: You know what the VIX actually measures, right?
Retail investor: ...market danger?
Me: Fear. It measures what people are PAYING for options. High VIX means option premiums are expensive.
Retail investor: Right, so... dangerous time.
Me: Dangerous for BUYERS. I'm a seller in times like this. A high VIX means I get paid MORE for the exact same put I am selling. It's literally a rate hike on my premiums.
Retail investor: Wait... so the fear index is helping you?
Me: Every spike. Fear inflates what people pay for puts, & great companies go on sale at the same time. The two best things in my world show up together & the VIX announces it.
Retail investor: I've been doing this all wrong...
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