AlexL.

Trading the Volatility Index - A Bearish Approach

You need to study up on the nature of VIX options a little more before posting trade suggestions on it. Your assumption of a 72% return at Aug expiry if VIX is at 32.5 is highly flawed. I understand your math (750/435), but you CANNOT simply assume the back month will be trading at $7.5 if spot VIX is 32.5. The Dec Call will be priced off of the Dec VIX future, and if you look at historical prices (esp in the past two years) you will find many cases where back month VIX options traded below the "intrinsic value" that you would attribute to vanilla options.

Basically, ChrisMcK summed it up perfectly above. The reason most brokers wont let you trade VIX diags is because they pose unlimited risk, a risk that you don't seem to be properly accounting for.