What Happens When the VIX Jumps from 13 to 28?

In early August 2024, the Cboe Volatility Index (VIX) spiked from 15 to over 60 in forty-eight hours. Cable news anchors warned of an imminent global financial collapse. Retail investors dumped high-quality dividend payers at fire-sale prices.

When volatility surges, option premiums inflate dramatically. Options that sold for $0.50 on Friday suddenly command $3.20 on Tuesday morning.

Instead of panicking, professional volatility managers follow a strict, mechanical script.

Our 3-Step Volatility Script

• Step 1: Never Sell Naked Options: Selling unprotected puts during a panic can wipe out a portfolio. Always use defined-risk credit spreads or cash-secured contracts.
• Step 2: Sell 30-Day Puts 12% Out of the Money: Target resilient companies with fortress balance sheets. When panic is peak, investors pay huge premiums for insurance they will likely never collect.
• Step 3: Close at 50% Profit: Once implied volatility drops and the option loses half its value, buy it back. Take your profit off the table and reset your cash.

Market panics feel terrifying in the moment. But if you have cash reserves and a mechanical playbook, volatility spikes become your most profitable trading weeks of the year.