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iPath S&P 500 VIX ST Futures ETN Message Board

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  • fitnessmaxx fitnessmaxx Oct 14, 2012 9:59 AM Flag

    Contango and VXX

    You buy and hold it because vxx has the potential to outpace every stock in the market at these prices. This is not the time to be shorting the vix.. I work with alot of hedge fund managers and all are saying the same thing... In the next 12-18 months vxx has the potential to top its highs in 2008.. If it hits $32 Friday I will buy more.. but i doubt it will hit $32 next week has a better chance of hitting $38...

    Sentiment: Strong Buy

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    • Assuming what you say is true, and that a crash occurs in say a year from now, followed by a spike of the VIX to 100 which is roughly 6 times where it is today. However if the Vix averages around where it is now and contango is as steep, this would translate to a monthly loss of 15%. Compounding that loss for a whole year will leave you with 15 cents on the dollar that you have invested. A VIX spike to 100 coupled with assuming that VXX follows suit, would result in VXX rising to approximately 90 cents. So even with a VIX spike to 100 a year from now, you would not even break even on your current investment!

      Sentiment: Strong Sell

    • LOL. "vxx has the potential to top its highs in 2008"? It was created in 2009. And its effective price then was over $2000.

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