Contango is the killer for this product for certain. However, directional movements can overcome contango for a short period of time. Look at the last few downdrafts for the S&P and the upward movement of UVXY can be quite dramatic. If you believe like I do that the S&P is overvalued and due for a 5% pullback, the risk/reward of UVXY at the current level is quite attractive. This does not mean the trade will be profitable as the insanity in the equity markets can continue. Look in the end this is a directional bet on the markets that if you are right you can earn a very nice return in a short period of time. It is not to be held for a long period of time.
" Imagine if the formula for your shares of UVXY was to be forced to sell tomorrow at 10 but you are also forced to buy with that amount of money that same equity at much higher 14.62 per share. "
This is exactly correct. The only way in theory to be able to use this vehicle profitably is to leverage it against a sustained downturn in the S&P 500, wherein the front month futures (temporarily) gain value over the succeeding month's contract. This happens only relatively rarely. Other than that, a momentary tick-up on the share price due to intra-day market activity can earn a quick buck or two. Overall, this and other similar volatility instruments are pretty much totally useless as profit generators.
Believe all you want but below is the undeniable iron-clad unquestionable fact why UVXY will continue to deteriorate, occasional upticks notwithstanding.
CONTANGO, DAILY ROLL AND STEEP CURVE: Here are the VX future Settlement Prices
VX 05/20/2015 14.6250
VX 06/17/2015 16.1750
VX 07/22/2015 17.0250
VX 08/19/2015 17.4750
VX 09/16/2015 18.0250
VX 10/21/2015 18.4750
VX 11/18/2015 18.7250
Imagine if the formula for your shares of UVXY was to be forced to sell tomorrow at 10 but you are also orced to buy with that amount of money that same equity at much higher 14.62 per share.. That is why UVXY has lost 99.50 percent since its inception.
You may get lucky and make good profit on ocassion and only in the short term due to a 5 -10 percent price correction, but do not think that you are right and the 99.5 percent loss in UVXY as fact on the ground is wrong , no more than believing that somebody actually swum upstream the Niagara Fall.
...that there's paid bashers, posers, and fake-trading shills on this message board, but does anyone else here who has a position like I do notice how quite a lot of the anti-UVXY folks clear out of here on weekends and holidays?
Some of my favorite posts here are the ones where the people talk about how they bought a stock before it gapped up, short sold a stock before it gapped down, sold a stock before it gapped down, etc. "Oh, yeah, I'm making a killing on that short sale that I made yesterday with that stock that is down right out of the gate today... Did I forget to mention that I made that trade yesterday to all of you?" LOL. Right.
Seriously... How many of you UVXY haters are Yahoo! employees? I already know for a fact that Yahoo! hires people to populate these message boards and talk about their fake positions, fake trades, fake lifestyles, and so on, so that they can keep the conversations going with people like me while Yahoo! bombards all of us with advertisements. That's a given. So, how many of you fit into that category? A show of hands, please!
Sentiment: Strong Buy
"Have you ever seen a grown man naked?"
"Do you like movies with gladiators in them?"
"Have you ever been in a Turkish prison?"
Sentiment: Strong Buy
I stuck toes in the pool yesterday with DMND and FREE, but it's SO tempting to beef up my position here even more than I already have it.
I can't keep this one off of my radar screen down here at these low levels!
I'm doing this for the kids at St. Jude Children's Research Hospital, which will receive a sizable donation from me after my sell limit order fills at $35.00/share. Bash me if you want, but I'll be doing good things with some of the profits if my dream comes true.
Sentiment: Strong Buy
...until the next earnings season. Lower volume, lower VIX. Just like last year at this same very time. Contango will stay present but diminish a bit. I doubt there will be any 10% correction but that's just MHO. UVXY will split and melt lower. GLTA!
Sentiment: Strong Sell
There'd never be a "class action" against ProShares for this trading tool. Their own prospectus very plainly states that UVXY will lose value over time, and trends toward zero.
In a bull market, the thing to do is go long with XIV. End of story.
Do what your granny does, and put your money in a cookie jar. It'll be safer there.
Today was the best time to buy it, Monday will still be OK, but you'll need to get in early.
It's totally a waste of time for the long term... But for a play on the VIX when the market turns, it's the BEST play in town. With the VIX approaching historical lows and the market banging against historical highs, This is the best place to be for the next week....Check back next Friday with your rebuttal.
do you enjoy losing $$$,& lots of it? Do you think your smarter then the MKT?Welp,your in the right place,UVXY will give you Maximum Pain,it will make you cry? it will crush you one day at a time,So welcome to the twilight zone,this episode is called,The few,the Proud,People who BUY UVXY, so grab your ankles,& let UVXY do what it does best,1 of these days UVXY will pop,i mean it will? i mean it has to?I mean?? Good luck you stupid saps & Suckers,UVXY & Pro Shares say thank you for your donation,And please keep coming back,JMO
VIX curve is looking bad for UVXY in the next few months, however there could be some turbulence for the market after this most recent pump.
If we get a serious correction than VIX could end up at 25 - 30 and UVXY would be approx. $35.00 - $40.00.
OK post removed again. Normally King is less than a nice person. He rants all week long and none of his offensive posts gets removed. Now on Friday he gets altruistic. Nice try sweaty smelly!!!