Volatility Play – Options on $VIX.X

Today is Friday, the end of the week. DJ Industrial is almost 400 points up from the low of the week at 9,834. It pretty much made up for the last two weeks of losses and is in the middle of 9,800-9,900 resistance area.

Accordingly, CBOE Volatility Index $VIX.X is near its support level at 23.59.

$VIX.X 52 weeks low is 22.19 and high is 89.53.

I just bought a chunk of +VIXLF contracts, that stands for VIX Dec 30 Calls. In other words, those are Call Options on CBOE Volatility Index with strike at $30 and expiration date of December 16, 2009.

In addition to the technical analysis, there is some fundamental support for my decision, and I’ll give more details shortly.