Use VIX, But Do Not Trade VIX Derivatives

Nice article at the Daily Options Report about why you should not trade VIX calls as a way to trade volatility. Check out the whole article, but as a highlight:

Primarily because the guy on the other side of the trade understands them better than you do. Particularly if he is running a big derivatives portfolio with all sorts of variance risk, while you are seeing the recent VIX poundage and want to speculate that has gotten overdone. And you don't fully understand the bet you are making here. Which is absolutely nothing to be embarrassed about; it's an extremely confusing product masquarading as something not so complex.

In a sense, the VIX is an estimate of the volatility of SPX options. As such, the VIX options are therefore derivatives of a derivative, making the analysis more complicated than most of us want and need to bother with. You are better off using the VIX as an indicator of overall market volatility, and then trading options on other assets off this information.