That's why I am selling UNG puts rather than buying shares at this point, limits gain but my cost basis will be 13.84 if it goes down, also why I bought UGAZ for just 10% of planned amount. I consider it gift if UNG goes down to 2.5. At that point I would consider full UGAZ position, UNG far out month ATM calls even LEAP, and shorting DGAZ as well if shares are available.
At current prices and environment, UNG seems safer than USO.
Both UNG and USO option premiums are fat considering the share prices and I will see how much I collect little by little, by selling puts while the prices are depressed.
It's been another difficult year-end and a new year.
VXX falling, sold VXX puts against share short yesterday and ended up kicking myself today. Closed small number of XIV shares which I got at the high of this spike. Just waiting for volatility to cool down.
Finally, started UNG long today. Stayed away since closing UNG short last summer. Sold UNG next week ATM puts worrying that it may go down further. Got into UGAZ, just 10% of planned amount. Hoping NG future goes down further so I can build sizable position.
Sold USO next week ATM puts on drop today, repeat of last week. Refilled some of lost USO shares but not fully yet.
Been looking at TLT short but missed chance.
I saw an interesting article on Seeking Alpha today, "How Does VXX's Daily Roll Work". It's a little technical / math oriented, but provides an explanation for why more people "bet" on the downside.
If people who already understand this are interested in going long VXX, because you're betting on a market crash or something like that, that's cool. However, if you don't understand the erosion / decay intrinsic to ETP based on near term futures, it's usually foolish to go long VXX for a long term play (more than a few weeks -- occasionally, a few months).