Hi Clive,
You are correct about the volatility of the VIX. I have an LD-AIM position in XIV which I took several months ago after a post by Toofuzzy. It has an upward bias, for the most part, because of its contango properties, so it is a good stock substitute.
Lately it has been a wild ride with XIV. XIV closed yesterday at $28.66 and its 50 day Average True Range (ATR) is $2.411, or 8.41%. Yesterday SPY closed at $194.46 and its 50 day ATR is $2.612, or 1.34%. Quite a bit of difference in the daily volatility of XIV and SPY. Usually there is a 4-5 times volatility difference between those two.
So far, I have been very pleased with the performance of XIV. It has been acting the way I thought it would when I began the LD-AIM program.
Best regards,
Ray
