there were about 6 weeks all of 2012 that you would have made money going long uvxy and something has to seriously be wrong to #$%$ the mkts long enough to move the vix. where is there anything more than rumors that something bad might happen; no where. the next week for certain to go long uvxy is week before the debt cieling.
the mkt is looking to push to record highs this yr. if you guys make money from something in europe or the middle east this month, you just happened to be lucky to have some money before uvxy takes what you put in.
Why don't you buy UVXY calls? You can get march $17 calls for 50 cents and even cheaper if UVXY trades down Monday. For a thousand bucks you can control 2k in shares. All this POS has to do is advance up towards $17 and you start making money. Best of all you have all the way until the middle of march for that move to happen. And in the end...the most you can lose is a thousand bucks. Heck, I'm thinking of getting some if the sequester BS starts up.
Balastona, Well said. The Vix has a very limited downside, may be down to 11.5 but huge upside. If Vix goes to $20, Uvxy will be at $40, and it can happen overnight. It takes one Madoff,, an international incident, an act of terrorism, a lowering of US debt rating or many other triggers to push Uvxy to $40. It's a matter of when, not if.
The interesting correlation is that on Friday Feb 1, although the markets hit 5 year highs, VIX & UVXY did not hit new lows and rose towards the close as the markets closed at high of day.
That clearly shows VIX, the closer it gets to absolute zero, the slower it will go down and some are starting to but put protection. Volatility seems to be basing in an oversold condition and when volatility changes direction it busts out real fast.