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How To Trading the CBOE on the DOW to Make Money

Updated on January 17, 2012

VIX Chart

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Trading the CBOE to Make Money in the Next Year

I am a writer who writes on a variety of topics but a writer none the less. I think writers have to be jacks of all trades and masters of only writing. So with that in mind I would like to share what I believe will be a winning strategy to make money in the stock market through the next election cycle.

In the USA the election is going to be close. And when an election is close people who happen to be investors get extremely nervous which means for the next year we are going to experience more volatile markets then perhaps ever. Inflation is out of control in this country and unemployment is sky rocketing. All of this makes for a very weak economy.

So where would I put a little bit of money right now? I wouldn't leverage myself to get in this market or would I risk more than I had to lose. It is a very important and real lesson to learn in life never to risk more than you can afford to lose. But with the market up and down like a yoyo lately and gold sky rocketing I would go for the CBOE or the VIX which is the volatility index. Sure it is great to physically own gold but ti is not really practical. If we do slip into a depression gold will be worth nothing everything will revert to commodities. People need food before they need anything else. And although I hear the grim news of MSNBC China is still holding up fairly well in this global economy. They will be effected by our bad markets but not enough to really impact Chinese society. If anything they may survive this better than all of us but I wouldn't place any investments in China until China reinvests in America.

What I can recommend with the understanding I am not a broker and I am not liable is for you to trade volatility through the CBOE or the VIX. It is almost guaranteed with the the current economic climate and political instability within the boarders of the USA. And where I would never bet against the USA, I would trade the volatility to survive a very difficult economic period and a politically unstable environment until the country appears more stable.

Within the last year the VIX has been as low as $19 and is now trading I believe at $36 dollars a share. Remember my rule of doubling your money and getting out. I still believe in that and when the VIX is down I would buy into it. Bad markets are great investment opportunities.

I am not a liscensed borker so please seek the counsel of a liscense broker before making any investment decisions.

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