We are finally getting a spike in the VIX. There is a possible trade here - VXX is the ETN that is supposed to track the VIX, but due to contract rollovers, it horribly underperforms the VIX. For example, VIX is well up from a year ago, but VXX is well down.

Whenever the VIX spikes, VXX follows suit, but over time it will deteriorate much faster. So I like to short VXX during these spikes. When the VIX settles down, VXX will go down more. The trick to this trade is to make sure you have enough cash/margin to hang on to your position. It is almost guaranteed to work within a few weeks or months, but since it's impossible to know where VIX will peak, you will likely be underwater in the short term. If you are on the edge marginwise, you could get forced out with a bad loss.

I prefer to sell calls on VXX rather than short outright, because you get extra cash and a little extra margin of safety.

The spike may have just started, so I'm going to wait a day or 2 before doing this.