At first glance, buying VIX calls when it’s “low” seems like a smart play. After all, something bad will eventually happen that will make the VIX spike.
Not exactly. Many traders have learned the hard way that simply buying VIX calls when the index looks “cheap” is usually a losing strategy. Here’s why.
The Problem with “Cheap” VIX
Low can stay low for a long time. The VIX can sit between 10–16 for months or even years in strong bull markets.
You don’t trade the spot VIX. Options and ETFs track VIX futures, which don’t always move in sync with the index.
Decay is constant. VIX futures products suffer from contango drag, and VIX options lose value from time decay while you wait.
Without a timing catalyst, “cheap VIX” is often cheap for a reason.
3 Common Scenarios You'll Lose Money When Buying VIX Calls
Scenario 1: The Endless Wait
You buy VIX calls when VIX = 14 (“historically low!”).
The market stays strong, and the VIX chops between 12–16 for the next 8 months.
Your calls expire worthless despite the VIX looking “cheap.”
Lesson: The VIX can remain low much longer than you can stay solvent.
Scenario 2: The Futures Confusion
Spot VIX = 16, you buy VIX calls.
But your calls are based on 30-day VIX futures, which are trading at 19.
The VIX spikes to 22 on breaking news, but futures only rise to 21.
Your calls barely move despite being “right” on direction.
Lesson: You’re not trading the spot VIX, you’re actually trading VIX futures when you buy VIX calls.
Scenario 3: The Timing Miss
VIX = 13, you buy 3-month calls.
For 2.5 months, the market stays calm, and time decay eats your premium.
Two weeks after expiration, the VIX finally spikes to 28.
You were right on the move but wrong on timing — and lost money.
Lesson: Being early is the same as being wrong when decay is constant.
Do This Instead
Instead, use our proprietary signals to detect when VIX regimes are changing. These signals help identify potential catalysts for volatility expansions, greatly increasing the odds that your VIX calls capture an actual spike rather than succumbing to decay in a persistently low-vol environment.