How does that work? Does that mean we'll be up more on Monday after expiration? I am very confused about how this works- if you told me the market would be up 1%, then down 1% I would have thought VXX might even be up during that time?
It is very hard for VXX to go up because the fund is usually selling lower priced expiring futures and buying higher priced futures for the next month out. Only when the next month's futures are about the same price or lower than the current expiring futures price can VXX really make a decent move up. This situation does happen, but only infrequently.
Right now the spot VIX is the same as the front month futures- well, about 1% different which isn't much. Contango is about 5% at the moment. Not as much of a headwind as usual for VXX. Keep in mind however that it's been very hard for the VIX to get over 20 the past year.
Corporate earnings weak except for the banks (low interest rates, consumer credit), I think QE3 was already factored in, so market maybe way overbought, Obama and tax hikes in 2013 think this is a good time to sell the market, lots of people sell in December because of the uncertainty...VXX might be a good way to go, the market has nothing to go up on , earnings are over, fiscal cliff, Europe, China, and a U.S. recession are in the way...I think we go down at least ten percent withing the next couple of months....its already starting(lots of selling on good news !!) The VIX was at 45 last october, the VXX at 200(considering the reverse split)((((so yeah I would say blame it on the market makers, they sell these options, and it creates a lot of volatility or manipulation in the markets
"lots of people sell in December because of the uncertainty"
Research Santa Clause Rally. Fear is usually low during December, especially due to the low volume trading near the Holidays. And VXX at 200 in October of 2011 doesn't mean a thing thanks to roll yield decay from contango in the VIX futures. We'll have to have a 2008 style financial collapse for their to even be a chance of this hitting anywhere near that...