Without doubt,TVIX has been by far one of the fastest moving vehicles,in the ETF/ETN universe.Because of its potential for huge gains,folks have piled in hoping to catch this tiger by the tail-hence this has caught the eyes of the MM'S.No one can covince me on a triple digit down Dow,TVIX a 2X Vix CAN BARELY GO UP 1 PT?!!
Speed of light.
Kidding. It's just a constant used in the calculation. taexpert copied that explanation from a blog. I hope he at least read enough of it to know that VXX and TVIX just reflect other instruments, and they're not going to be affected by shorts or MM's like he initially claimed.
Where do you learn this stuff? MIT grads? Or part of brokerage liscensing training. I never quite figured out calculus, so may be beyond my comprehension.
What is the best way to learn this? Any books or online courses that explain this stuff for the novice. I guess Brent was right about "rank amateurs" trading this etn potentially getting wiped out!
With the fed ex beat - I should be able to pay for a semester or two at an IVY league university to learn about VXX and calculating contango!
VXX = (p1*n1+p2*n2)/c
As of now
VIX 33.60 +1.73
VX Q1-CF 33.67 +1.57
VX U1-CF 27.65 +0.95
VX V1-CF 26.80 +0.85
VX X1-CF 26.20 +0.75
So by replacing you get VXX=33.4, the slight difference with the market value is simply due to daily demand/offer dynamics.
Note that n1, and n2 change every day
r: the number of remaining days until the expiration of the first future
Then n1 is reduced by n1/r every day, and with that amount you can buy more n2.
So if there are r days left to expiry of future 1 then as of tomorrow n2 will become:
and n1 = n1-n1/r
er..... how about PRICE = UP or DOWN...that's all anyone wants to know.
TVIX and VXX are strange animals. When you buy a stock or a normal ETF like SPY or QQQ, your buy influences the price of the underlying security. Not so with VXX or TVIX. If everyone in the world wanted to buy TVIX it wouldn't move the price one cent. Be careful with these
<<If everyone in the world wanted to buy TVIX it wouldn't move the price one cent. >>
You are one stupid and manipulating guy.
TVIX and VXX can be easily manipulated because VXX is ETN and has $800M tiny market cap.
See what happened with TVIX compared to VIX in 8/17/11 and 8/22/11. The MM are controlling VXX easily because of its tiny cap of 800M. The MM is accumulating VXX at low level using manipulation techniques and distributes it in a volatile day with 10 to 15% jump