I'm not so sure about that. If you look at Friday the market was barely down and the VIX exploded higher, now that had to be all about Crimea. It is a bit surprising that there was such a move in the VIX, it should fall back as long as we aren't engulfed in war by Wednesday.
For there to be a plunge something really bad better happen in ukraine. Looking at vix and implied options volatility a lot of angst was already priced in.
Should be ok. VXx has never been up more than 20% in a day and that was two days in 2011 when the European crisis caused two separate 5% drops in SPY. When the markets opened after 9/11 VXx did not exist but would have been up 15% that day. So I doubt VXx goes up more than 20% next week. However if it goes up 20% Monday alone just get the heck out of any short positions.
Russell 2000 is its own thing, makes no sense sometimes.
Vix went up because people were buying protection for Ukraine. If nothing terrible happens this weekend it will come back down. VXx and uvxy track the futures not the spot vix. The futures never go up as much as the spot.
The reason I ask,is because I always wonder what happens if your broker has no shares to short and you shorted naked calls. They just give you cash settlement at Friday close then?
I tend to agree that things will calm down some next week. The spot is already near 18 indicating to me that a bad event is priced in. If its just as expected which is the vote goes for secession and Russia moves to occupy and us sanctions come in I do not think uvxy would rise much. Maybe it rises to 90 next week at the most, cannot see much more. Good luck, hope you make it big time
Thanks for a well reasoned and well written message. I don't suppose you would mind justifying your opinion that today's UVXY rise was caused by something other than Ukraine? What else just today caused the huge spike other than people buying protection in case Putin blows Ukraine up this weekend? I find it amusing you think there was something besides Ukraine that made the VIX blow up today specifically.
Wonder why UVXY continues to rocket higher every single day when nothing new has developed sure makes you wonder if someone knows something.
Amazing. UVXY is up nearly 20 bucks on Ukraine do people think he's going to nuke them this weekend or something?
Of course if it *does* end...
I don't think it will drop today. Next week though seems like a good bet. As long as Russia doesn't nuke Ukraine this weekend, I would expect a VXX decline next week especially with expiration.
I hope that doesn't happen! If the market crashes we are all in real trouble because it's the only part of the economy that is doing well.
Just a hunch I've got.