Early Retirement Extreme Forums

I think I have a handle on how vxx works, however most of what I see is recommendations to only do short term trades. However during large corrections (covid) the price on vxx skyrockets. Am I missing something or would buying vxx and holding until the next crash be a good hedge?

Until the "big event" it's a guaranteed loser due to decay.

Beyond what 2Birds1Stone said, trading volatility is trading a biproduct of a crash but isn't trading the crash itself.

To save money buying a decaying asset, one could buy very out of the money puts because they're so cheap. You'll lose a little bit of money each day but your upside is basically unlimited (it's an option contract) instead of limited (volatility can only go so high).

I would definitely not buy VXX for downside protection. You won't be rewarded enough for the cost.