Forbes – Looks like the biggest derivatives trade of the week is buying VIX options. That’s the way most hedge fund managers are going to protect themselves from wild swings in the market, expected all week long thanks in part to the US credit downgrade to AA+ from AAA by Standard & Poor’s on Friday, and the ongoing sovereign debt drama in the eurozone.
“My option strategy is the VIX and only the VIX,” says Joel Smolen at Axion Capital, a San Rafael, Calif hedge fund.
