Cheap Hedge Against Stock Selloff With VIX Near Lows
The VIX is flashing calm, but risks are piling up. Here's why cheap protection is worth grabbing now.
The VIX — Wall Street's so-called fear gauge — is sitting at comfortable lows. That sounds like good news. It's not. When volatility is cheap, that's exactly when you should be buying it, not ignoring it.
The market is pricing in calm while real risks quietly stack up. That disconnect is your opportunity. Options-based hedges get cheaper when complacency rules, meaning right now you can protect your downside without paying a premium for panic.
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Think of it this way: insurance is cheapest when nobody thinks they need it. If you wait until the selloff starts, the cost of protection spikes fast. The traders who win are the ones who hedge before the crowd wakes up.
The playbook here is straightforward. Low VIX readings historically precede volatility spikes — not always, but often enough to matter. Buying puts or volatility exposure when fear is absent is a disciplined, time-tested move that professional traders use routinely.
Don't let a quiet tape lull you into a false sense of security. The opportunity to hedge cheaply is open right now, and it won't stay that way forever. Continue reading at MarketWatch.com
