Even in those seemingly sideways market, there are still some incredible profits to be made straddling the CBOE Fear Index, the I:VIX . After all, there are multi-billion dollar funds dedicated to just these strategies.

The best way consider the long-term price action of leveraged VIX products is to think of them as a normal company stock. Remember how nice it feels to make it to the ex-dividend date, and know that you'll pull some value from your holdings? Remember that feeling.

Now forget about it entirely while trading either with or against volatility. There are no free lunches in these trades. The hard truth about these products is over time, unless in a sustained bear market, long positions will lose money. Appropriate timing is of the utmost importance.

The strategies below should be used as a high-risk complement to your portfolio and with a small percentage of assets. Below is my definitive list of what I have found to be the most profitable of all VIX trades, garnered through both significant losses, and celestial gains.

1. Head-to-Head Against The Fed

It's a very interesting time in the stock market, with rates near, or below zero, the world round. This, coupled with the recent highs in world markets, make for a very approachable situation in which to make some life-changing VIX plays.

That being said, you must understand this trade is one of the most crowded ever. This means numerous head-fakes, price-rakes, and extreme price action. This specific trade is one of the most psychological atmospheres, rendering otherwise sane traders quite irrational. Even our Romulan Commander of The Federal Reserve Janet seems ever more incredulous at the current financial conundrums dancing across the world stage.

There is an extreme benefit to this kind of action. Stay sidelined with dry powder, let the novices reveal their mistakes, and when the dust starts to settle and a trend is clear, ride it till it reverses.

A good rule is to never trade VIX products within 10 minutes of a Fed announcement. There is just too much emotion and the trading is too "human." A trend presents itself when the patient money comes in.

Remember, that's you. The patient money. The smart money. Being on the wrong side of this trade is painful and humiliating. Conversely, being on the right side can fund a pretty lavish vacation.

There is no set game for how to play the Fed. Only to remain cautious and vigilant to your strategy.

2. Short the Unfortunate

Sometimes in our world, terrifying things happen.

Earthquakes. Military Coups. Terrorism. 

These events are like spraying gasoline on the fear index with a fire hose and tossing in match. The VIX just absolutely explodes. When such events happen, there will be euphoria in longs. Investors who have held volatility for weeks and months and finally they are green. Good for them, but that is not where the real profits are.

When such incidents occur, stay sidelined. Keep your powder dry. When the fear turns to panic, start scaling in your short.

Make a bet against fear. Go long hope, on the premise that humanity will overcome such unfortunate events.

That is, unless, such a disaster affects the economic infrastructure of that market segment. To use a recent example, the Fukushima Disaster devastated Japan's industrial sector. I'm not saying short industrials, but fear proliferated in such a terrifying environment. Being short volatility at a time like that would have been a portfolio killer.

Or, say there was another attack on essentially an entire country, like 9/11. In this case, the best move, even for the hardiest of traders, is to wait for the dust to settle. It's hard to sleep on a mattress stuffed with blood money.

Because of their popularity, you will pay some of the highest premiums in the market to short VIX products. When timed correctly though, it won't matter. What's 5% on a 65% gain, which smart investors made (and much more, actually) shorting the 2x products off the February VIX highs to today.

Another option is to buy distant OTM put options with an expiry of ideally 45 days. The problem with this strategy, although eliminating short borrowing fees, is the most crowded of the VIX products plays, and the price premium on puts when the VIX is in the clouds is egregious at best.

This strategy is sweeter than molasses and a boon to shorts through a long-term bull market. Wait for VIX to crest 25-30, open your short, and go on vacation. Return to liquidate, and do it all over again.

Securities that trade off the VIX theoretically have no bottom, which is something volatility players know all too well. (TVIX) - Get VelocityShares Daily 2x VIX Short-Term ETN Report , a 2x inverse volatility, has seen its share value decimated 96% since the Chinese stock market flash-crash of August 2015. (UVXY) - Get ProShares Ultra VIX Short-Term Futures ETF Report , a similar leveraged instrument issued by Invesco Powershares, has seen a similar burn, as seen in the chart below. Flip it upside down, and you will see for shorts, what an absolute dream ride it's been.

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3. VIX Under 12? Go Long

And sit on your hands.

Volatility, like most everything, is cyclical. To quote the ever-quotable Sir John Templeton, "Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria."

Your job, in this trade, is to analyze the VIX vs. world market indices and indicators that determine oversold/overbought conditions. Your job is to locate and recognize that euphoria. When indices climb higher, and traders dart their eyes to and fro, searching for a reason why, toasting champagne to New All-Time Highs, that's your cue.

That's the blind optimism that signals troubling may be brewing. If the conditions are right, this can be a wonderful opportunity to make a quick 20%, 40%, or more.

Volatility can never completely disappear, as you can see in the chart below. The massive divergence we are seeing of (SPY) - Get SPDR S&P 500 ETF Trust Report vs. VIX has never been so great. That, coupled with SPY looking fairly stagnant and top-heavy, open up an opportunity for profit from a minor correction or get rich from a prolonged sell-off.

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4. Aggressive Intraday Scalping

Unless you're an MIT graduate, chances are you haven't sold your quant algorithm to a fund. These computer programs shave cents off stocks and take advantage of the bid/ask spread in ways humans can't, and the funds that run them profit handsomely.

There are two keys to this kind of trading you can do at home.

One: a significant amount of capital, since you are looking for action of around 50 basis points, so in order to book the gains, including commissions, you need significant cash reserves. A good start is fifteen thousand per trade.

Two: there's a reason it's called a scalp. You need to be in and out of these trades like a hummingbird. This is not the trading environment in which to hesitate. Set tight stop-losses, have a set of rules you never break, and oscillate within the trading range cold as a computer.

I would not recommend this trading method as the sole means of profit for a portfolio. You are playing a very crowded field with many seasoned professionals smashing the spread hundreds of times a second. Also, it is a stressful trade, and requires significant cash.

You can trade on margin, but it is tremendously risky, and not recommended for such volatile products. Another method is to get your broker to lower commissions-per-trade, as you will be extremely active within this trading method. Some brokers, such as Scottrade (which has a very attractive execution time) will lower fees down to a flat $5 a trade, if you trade often enough.

It's important to discuss this strategy with your broker. Just beware of ballooning margin agreements and the implications of those interest rates. This can be some of the most expensive money in the world to borrow, and I suggest avoiding it entirely.

5. Utilize its Intended Purpose

And use it to hedge. This is not a sexy trade. Nobody will queue up to watch you hedge and tell their friends about your exploits in reducing gains and losses.

But, with a broad portfolio that is risk-on, heavy in volatile securities that run lock-step with the market, buying longs of VIX products when Relative Strength Indicators show the market is overbought can greatly limit losses to your portfolio. It's just a smart trade, really.

Of course, you won't collect dividends. Over time you will most surely lose money in these trades, but think of it as insurance, insofar as you pay for the pleasure of protection and the comfort it brings.

Which, you never need, until you do. It's well worth the investment for less active traders to hedge against volatility with the 1x VIX products such as (VXX) - Get iPath Series B S&P 500 VIX Short-Term Futures ETN Report . The 2x vehicles like UVXY and TVIX are just too volatile to hold for a long period of time.

As always, I suggest paper-trading these strategies before implementing them with the amount of capital required for these trades. A final word of caution that this is an extremely risky security class. That being said, there tremendous gains to made as well. 

This article is commentary by an independent contributor. At the time of publication, the author held UVXY long and short.