I was thinking about a great way to play the whole fiscal cliff and one thing shot to mind. It is a surefire way to put your money where your mouth is, at least if you are like me in thinking that an agreement is not going to be reached by Christmas.
Forget the stocks that will benefit from the cliff, think of the other metrics that are bound to surge. The one that I beleive will skyrocket soon is the VIX.
The VIX shows the market's expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. As volatility increases, so does the VIX.
I believe that volatility is almost certain to increase through the end of the year and could reach new highs in 2013.
Do you think going long volatility is the easiest trade ever?
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