VIX Volatility Hedge
Six simple rules read the market's fear gauge, then split your money between four big stocks and gold. One trade a day at 3:45. A system you can actually watch work.
The 4 largest U.S. companies by total stock market value, rescanned on the 1st trading day of each month, plus gold. The single largest company gets a slightly bigger share.
Six rules read the market's fear gauge (the VIX, an index that rises when investors expect bigger swings) and the S&P 500 every afternoon. The rules are checked in order, like rungs on a ladder. The first one that is true decides how much goes to stocks; the four biggest stocks carry that share and gold takes the rest. Press run and watch each rule check in.
Historical example · September 8, 2026 · not a live signal
Every version of Vol Harvest was backtested, meaning the rules were run on past price data, over the same eight years, 2018 to 2026. The version we run (V5) is the top line. The versions with extra machinery (machine learning, a trailing stop that moves the exit up as price rises) sit underneath it, so simpler won.
The share of trades that made money.
Dollars won for every dollar lost. Above 1.0 means the system made money.
The worst drop from a peak before recovering.
The total result after the modeled costs.
Return earned per unit of risk. Higher is steadier.
The same rules run through our own backtest on four years of daily prices, May 2022 to May 2026. Move the controls above and every number and chart below changes with them.
What one dollar would have grown to. Vol Harvest in blue, the S&P 500 dashed. Red bands are days the rules sold everything; orange bands are days they bought while others panicked.
The selected dates and settings, year by year, next to the S&P 500. 2022 and 2026 are partial years, so read them as fragments, not full results.
Deeper blue is a bigger up month; red is a down month. Year totals sit on the right. The controls above apply here too.
Drawdown is the drop from a peak. This shows how far below its previous high each one sat, day by day. Vol Harvest's job is to make that drop shallower and shorter than the index.
The Sharpe ratio measures return earned per unit of risk taken. This is a 63-day window, annualized. Above 1 is a good quarter. The question is how often Vol Harvest lives above the line compared with SPY, the S&P 500 fund.
Stocks in blue, gold in gold, cash in grey. Every step is a day a different rule took over; the flat stretches are days nothing changed, which is most of them.
The grey line is the VIX, the market's fear gauge. It rises when investors expect bigger swings. The colored strip along the bottom shows which rule was in charge each day.
The share of days each rule was in charge. Hover over a bar to see the average daily return while that rule was running things.
How much of the total return each holding contributed: its share of the portfolio times its return, added up over the range. Gold is the gold bar.
May 2018 to May 2026. Leverage means borrowing to hold more than your cash allows. This shows what it buys and what it costs, and what trading at different times of day does to the numbers.
| When the trade goes in | CAGR | Sharpe | Max DD |
|---|---|---|---|
| Exactly at the close (ideal) | 29.3% | 1.36 | −19.1% |
| Closing auction, 3:45 PM (what we do) | 26.9% | 1.27 | −20.7% |
| Next morning's open | 25.6% | 1.21 | −25.2% |
| Next morning, plus 0.1% slippage | 21.2% | 1.03 | −29.5% |
| A day late | 24.4% | 1.16 | −34.1% |
This is the same Python code that produced every number on this page, not a summary of it. One file, six rules, one daily 3:45 PM read, and the backtest that checks it all.