What I like about trading VXX/UVXY short, my pofits allow for me to venture into other trades. I have posted in the past that when oil is less than $90 its a buy, between 90 and 95 buy/hold, 95 and 100 sell/hold and 100 sell.
One of my hedges against my short volatility positions (mostly through puts) is to be outright short double leverage oil etfs. I find that oil almost always drops with quick market corrections. The double leverage oil etfs also degrade over time much like VXX, but just not near as quickly. If the short oil trade goes against me when the volatility trade goes well I will make much more on the volatility puts then lose on the oil short.
That sounds good. I would only be concerned if something crazy happens with Iran, and get a catastrophic event in mideast that could result in market volatility as well as skyrocketing oil prices.
I have noticed that during normal market conditions, oil tends to trend toward $100 bucks. It rarely goes below 80, and is a screaming buy when it does. And, is a worthy buy whenever trading between 80 and 90. With stock market near all time high levels, there are not many bargains out there. Perhaps Aapl, ?Gold, and oil. Short VXX or UVXY is still the most sure way to make money over time, so I will hold my new core short position that did quite well today, and simply add to it when/if we get the expected May pullback.