Seth, I was reading your article on your 5% Contango rule (http://www.talkmarkets.com/content/etfs/vix-leveraged-etps-and-the-5-contango-rule?post=133357)
As I look at contango now on 8.13 it’s at 4.28%
Do you recommend waiting for contango to return to 5-10% + to begin a short position?
Also, I noticed at one point today the spot VIX actually rose above the August futures price. Is that normal as we approach expiration?
thanks

Above 5% has a greater probability of successful short trade near term. Ultimately if one decided to short below 5%, so long as they maintained appropriate liquidity, they would eventually see a profit anyhow. But the greater percentage contango the greater the profit potential near term. Yes, as we approach expiration the front month futures contract is rolling daily down to the spot price. In the case of today, you have a spike in VIX causing that convergence sooner however. It can still spread apart again, but this can happen as you witnessed today.