If you're the impatient sort and just want in, you can dollar cost average into a short VXX , short UVXY , or long SVXY position with short shares (in the case of VXX and UVXY ) or long shares (in the case of SVXY , since it's an inverse). Because I'm not particularly fond of the various warts associated with a short shares position (on margin, heart attack on VIX spike), I'm opting for SVXY long shares here instead. Notably, SVXY long shares have their own warts: (a) they're pricey compared to VXX and UVXY ; and (b) the underlying is subject to a "terminal event" -- an event where the VIX spike is so dramatic and profound that SVXY goes to zero. To "cover" that remote possibility, I've bought the cheapest, deepest out of the money long put there is -- the January 18th 2019 2.5 put (currently 439 DTE ), which I'll leave in place as I accumulate SVXY long shares either on VXST/VIX ratio spikes or on a dollar cost averaging basis or both.
The first set of shares was bought at 106.25. As you can see by the chart, this wasn't an ideal entry (there was a VXST/VIX >1.00 event on 10/25 shortly before I bought these when SVXY dropped to 94), but the notion is to accumulate shares over time and let contango work its magic as opposed to fretting over "surgically ideal entries."
* -- I like a ratio of 1.15; 1.00 seems to produce too many occurrences.
** -- I will, in all likelihood, continue to do those "one-off" trades, although we've had very few of the >1.15 VXST/VIX ratio events this year to take advantage of.
Also, do you wath the VIX/VXV ratio? I'm curious to see what reasoning brought you to VXST as the denominator.
Just some thoughts. I've compared long shares against verticals and have settled on the spreads as the safer approach while offering similar returns.