green good news futures are beet red, S&P down 2o cents, and DOW is down 2 pt's? are ya happy now? the problem with buying and holding UVXY, is every day you wake up, you hope for a disaster so UVXY will fly! not a good way to live! IMHO G-L.
jondow: I hope you don't actually believe that we are hoping for a disaster, or even that it takes a disaster for volatility to increase significantly. Last year volatility picked up right after the US gove't finally raised the debt ceiling. Disaster averted spurred the sell-off and volatility. Partly, though, because they raised the debt ceiling but also kicked the can down the road as far as actually addressing the problem. Whihc is fast approaching again. Then it peaked when talk of a default by Greece returned to the headlines. There was a micro-spike when the Japanese tsunami hit, but that was shortlived. Disasters do not spike volatility so much. It is the big sell-offs that do. And sell-offs usally result from poor economic management or bad decisions by our prudent leaders. Those aren't disasters. They may have disastrous results, but they are not disasters per se.
To see this thing "pop", you need a catalyst, just like any other holding. But, with this one, if you don't get that catalyst, not only do you not get a "pop", it just goes down, down, down, down, down, down, down, week after week. This is where even a short-term UVXY chart comes in handy, if you haven't been watching this thing for weeks. Much uglier chart than $VIX, yes? Without a significant catalyst that's negative for the markets, UVXY doesn't even trade sideways for any length of time. So, that's why greenie here can't take it anymore. He just watches this thing tank because he timed it wrong, and now he's waiting, waiting, waiting, waiting for the "big one" so he can get his "pop". Like so many others.
So, if you buy now at $5+, and UVXY trends to below $3, as some rightly or wrongly predict, what are you left to do but pray for a sell off (basically a disaster for anyone with a stock market based retirement account like, say, 80% of Americans under that age of 60) to get this thing back above $5? How else will it get back to $5 from $3? Much worse, how many out there are foolishly holding this thing since $10? How are they going to get back to $10, especially if UVXY does see $3? It will take some time for the markets to sell off to that degree, yes? Or a 911-type disaster. Now, that's a weird way to get back to even. In that case, do you even celebrate the fact that your account is back to where it was when you made the mistake of buying UVXY?
In summary, if you want to be on the long side of UVXY and do something relatively non-sensical, like hold the d@mned thing without an existing catalyst, timing a buy is difficult, yes? You have to have a market defeating catalyst and a due date to achieve a gain. So, what is it and when will it hit (start)?
Here's an idea: Why not wait for the catalyst that triggers the sell off, and then get in? If you did that with the historical catalysts you spoke of, yes, you miss the initial first day "pop", which would likely be relatively small in the incidents you spoke of. But, you also miss the daily checking of your account, watching it slowly (sometimes not so slowly) approach $0, waiting for the catalyst to manifest, or worse, hoping for the "big one", since that will eventually be the only thing that will get you back to where you once belonged.
Bottom line, don't hold this thing long until you have a d@mned good reason to do so. GLTA.