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iPath S&P 500 VIX ST Futures ETN Message Board

  • jupiter_symphony33 jupiter_symphony33 Apr 23, 2013 11:53 PM Flag

    VXX performance in a bear market

    Looking at the VXX chart I got to wondering...

    What would happen to VXX in a bear market, if prices began to fall consistently over time and didn't rise for a sustained period. Would the chart begin to show a sustained uprtrend over time, just as we now see a sustained downtrend?

    Right now decay and contango are at work. But I would like to know if decay really has an irreversible effect on this fund so that. Now and then someone posts a message claiming something like: "VXX will never go over 30 again."

    True or false? Could VXX climb back up and reclaim all its losses if market conditions favored it?

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    • All its losses since when? 2009? No. 2010? No. 2011? No. 2012? No. January 2013? No. Feb? No. March? Maybe. Not likely though.

      • 1 Reply to nomoredns
      • nomoredns,

        well from what I can see the high in march was 25 something. So what you're saying is that even in an extended bear market (I am thinking years here, or even just months) VXX would never go over 25?

        If this is so, what is it about this product that makes that impossible?

        The chart shows that starting in July 2011, VXX spiked from around 80 to 200. That is a 120 point movement in the matter of a few months. I wasn't in the market then, so I don't know what caused this spike, But if it can move 120 points in a few months, I would imagine that in a bear market lasting years, it could move up much higher than that.

        I have heard many posters here saying it will never go over 30 again, but so far no one has provided a really good explanation of why this cannot happen.

    • VXX is only for daytrading is the way I been playing it..maybe if world war 3 broke out it would go back to 200

30.73+0.28(+0.92%)Oct 25 8:00 PMEDT