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Ever feel like the market is just a little too scared?
That’s been my read on the VIX, also known as the market’s fear gauge. It’s been sitting stubbornly above 20 — a level that usually doesn’t last — and instead of waiting around for it to collapse, I’ve been doing something about it.
I’ve been shorting it systematically and adding to the position as it climbs.
I get asked all the time why I’m running so many different strategies. One day it’s Overnight Options, the next it’s Two-Way Options, then it’s the Income Machine.
It’s not because I’m trying to push a bunch of products — it’s because different market environments require different tools. Markets shift, distributions shift and if you’re going to stay consistent, you need more than one way to approach volatility.
This VIX strategy is just one part of that broader playbook.
Now, I know what you’re thinking: “Nate, that sounds like a recipe for disaster.” And you’re not wrong — if you do it carelessly.
But here’s the thing: I’m not tossing shorts at the VIX and hoping for the best. There’s structure behind every move I make.
The VIX Laddering System
Every time VIX crosses above 20 — which means average volatility and moves of 1% up or down a day — I put on one short position. If it climbs to 22, which is slightly above average volatility I add another. If it hits 25, I add a third.
It’s mechanical. No emotion. No guessing. Just levels and execution.
And yes, VIX has stayed elevated longer than I expected. But I’m not uneasy about it because this system only works if the risk management is airtight.
Before I enter the very first short, I calculate my total risk across all three potential trades. I know exactly how much I’m exposed to before the first order is even placed.
Once I hit that predetermined limit, I’m done. No extra adding. No cost-averaging into oblivion.
No hoping VIX collapses just in time to save me. That discipline is what keeps this from blowing up.
The One Rule That Changes Everything
Current market conditions make this kind of structured approach even more effective. Time-cost cushions have more value now than they used to, even if some argue broader systemic risks might be rising.
That’s a much bigger conversation, but for the day-to-day and month-to-month trading environment, the structure works — and it works well.
I actually did a full presentation on the Opening Playbook on Jan. 21 breaking down exactly how I build this ladder, but the core principle is simple: Know your total risk upfront and never exceed it. That’s what separates a disciplined trade from a disaster. You can watch the presentation here.
Shorting volatility isn’t for everyone. It takes patience, discipline and a real understanding of where your risk ceiling lives.
But if you approach it with structure, intention and your risk capped before you begin, it can be a powerful way to take advantage of elevated fear in the market.
Now don’t forget to join us at 10 a.m. ET weekdays for Opening Playbook, and at 3:30 p.m. ET Closing Playbook!
Nate Tucci
Tucci Trades
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.Â
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