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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: 10K a day who wrote (35060)	5/24/2000 12:34:00 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 42523

true...because during crashes the VIX spikes from anywhere between 60+ ('98) to 170 ('87). that means options are so highly priced that not even a directionally correct bet will yield a profit, unless the collapse goes much further. it does however make sense to buy puts as long as the VIX stays below 30 and the trend remains a downtrend for all intents and purposes. of course downtrends sometimes end before the VIX spikes any higher than that, but if you have a vast portfolio of long positions, puts with such low volatility premiums are an attractive hedge for just in case. good night!