Stop Paying Programs that Systematically Buy VIX - It Doesn't Work!
How CI Volatility's Research-Driven Approach Beats Automated Buying
The promise sounds compelling: subscribe to a service that automatically buys VIX calls for you every month, providing portfolio protection while you sleep. Set it and forget it. Professional management. Sophisticated algorithms. Peace of mind.
Here’s what they don’t emphasize in the marketing materials: you’re signing up to systematically lose money.
It Simply Doesn’t Work!
Across the investment landscape, certain programs have emerged selling systematic VIX call buying programs to retail investors and even institutional clients. These services promise to handle the “complexity” of volatility trading, implementing regular purchases of VIX calls on your behalf. Some run weekly purchases, others monthly. All share the same fatal flaw: they ignore the fundamental structure of volatility markets.
When you systematically buy VIX calls—whether you’re doing it yourself or paying someone to do it for you—you’re fighting against powerful structural forces:
Mean reversion is relentless. The VIX averages around 19-20 and gravitates back to this level with remarkable consistency. Markets spend most of their time calm. Since 2010, the VIX has spent approximately 75% of trading days below 20. Every day that passes without a volatility spike, your premium decays. This isn’t occasional—it’s the default state.
Contango destroys long volatility positions. VIX calls actually follow VIX Futures, not the VIX itself. The VIX futures term structure typically trades in contango, with longer-dated contracts priced higher than near-term contracts. This creates a mechanical cost to maintaining volatility exposure over time. The carnage is visible in products like UVXY, which lost over 99% of its value from 2012 to 2025 despite multiple major volatility events during that period.
Time decay accelerates mercilessly. VIX options carry high implied volatility, resulting in expensive premiums. An at-the-money call might cost 2-3 points when VIX is at 15. For that option to break even, you need the VIX to jump 13-20%—and it needs to happen before theta decay consumes your premium. In the final 30 days, time decay accelerates exponentially.
Do the math: if you allocate 1% of your portfolio to VIX calls every month, you’re spending 12% annually. In a typical low-volatility year, you might see 10-11 months of those positions expire worthless. Even when volatility spikes occur, they’re often too brief or too small to compensate for the accumulated losses.
The Program Profit Model
Here’s the uncomfortable truth about systematic VIX call buying programs: their business model doesn’t depend on your portfolio protection succeeding. They profit from management fees, advisory fees, or subscription costs—win or lose.
A typical program might charge 1-2% in annual fees on top of the option premiums you’re already paying. You’re now bleeding 13-14% of your capital annually before a single volatility spike benefits you. Over three years of normal markets, you’ve incinerated 40% of your allocated capital.
These programs often disguise their poor performance through selective disclosure:
Highlighting spike performance: They’ll showcase the month where VIX calls returned 300%, omitting the eleven months of -100% returns
Percentage games: Showing percentage returns on individual trades rather than cumulative portfolio impact
Survivorship bias: Marketing materials feature their “wins” while the overall strategy slowly hemorrhages capital
Complexity as camouflage: Using sophisticated language about “volatility risk premia” and “tail risk hedging” to obscure simple systematic buying
The algorithm executing your trades isn’t smart—it’s scheduled. It doesn’t know when volatility will spike any better than you do. If it did, it wouldn’t need to buy every single month.
If you’re considering such a program, recognize that you can achieve the same trades yourself—minus the fees—by simply buying VIX calls every month. The program adds no value beyond automation of a losing strategy.
How CI Volatility’s Research Changes the Game
The solution isn’t to abandon VIX calls entirely—it’s to stop using them systematically and start using them strategically.
This is where research-driven approaches create enormous value. CI Volatility, a firm specializing in volatility analysis and risk management, has conducted extensive research on identifying high-probability environments for volatility expansion. Their work represents the antithesis of systematic buying: selective, regime-aware, and probability-weighted.
Rather than buying VIX calls indiscriminately every month, CI Volatility’s research identifies specific market conditions that historically precede volatility spikes:
Firms like CI Volatility have dedicated themselves to analyzing volatility markets full-time. Their research identifies structural opportunities that are invisible to systematic approaches. Use their insights to inform timing rather than executing blindly.
The Bottom Line
No algorithm, service, or systematic program can overcome the fundamental math of mean reversion, contango, and theta decay. Paying someone to systematically buy VIX calls for you doesn’t solve the problem—it compounds it by adding fees on top of structural losses.
Random or scheduled buying will lose over time. The edge exists in regime identification, timing, and selectivity.
Research-driven approaches like those developed by CI Volatility transform VIX calls from a systematic wealth transfer into a strategic tool deployed when market structure offers genuine asymmetry.
Don’t outsource your thinking to a systematic program. Outsource it to rigorous research that identifies when buying actually makes sense.
