"This is going down. Look at a chart. VIX could do to 80 and this will still dive."
Thanks for the warning.
But please explain to us newbies why UVXY would "dive" if the VIX were to soar to 80. Doesn't UVXY have something to do with VIX futures and isn't there some kind of relaionship between spot VIX and its futures?
"I am telling you adamantly VXX will print 55.55 in 2014, because I have a strong will to live and I did promise to kill myself if this does not happen."
"I have been trading in and out and currently hold 20,000 shares VXX which is 100% of my net worth."
"If it goes to 54 and then 0 so be it."
Nomo, with all due respect, logic dictates that if VXX fails to print 55.55 you will ne'er have the opportunity to take your own life.
Because if, as you claim, you have 100% of your net worth which you, with your usual modesty, peg at $800K and are willing to lose it all as VXX asymptotically approaches 0, then more likely you might regretfully lose your life at the hands of your husband...
He, of course, would be subsequentally acquitted of murder with a verdict of "justfiable homocide".
PS: Quite frankly, if VXX fails to reach your target, I would prefer that you keep your life, lose your internet connection...
Thanks for your input, Joey.
The real implications are lots of extra work for my accountant, loss of deferral of recognition of taxable gain, and conversion of cap g/l from long term gain to partial st gain and lt loss.
In regards to SVXY, I now buy equity only in IRA and only options in taxable acct... I prefer SVXY to XIV because one can hedge with options.
remate, I agree with your responses.
And I wish to expand on your second response because it underscores a general misconception regarding short-selling.
Should I sell 1000 shares of UVXY tomorrow at $56, My account will show a "short credit" of $56K marked against a 1000 share short position in UVXY.
i trade with Fido. Because there is a relative shortage of shares on loan for shorting, Fidelity cannot locate those shares amongst their clients and must go beyond the firm to find shares to loan to me.
Hence, UVXY is considered HTB, hard to borrow, and brokers will charge what the market will bare to loan out those shares. The current HTB rate is 15%/yr!
Whether the broker will pass along, inflate, or forgive the short fee is up to the broker.
Being charged the fee has nothing to do with whether a client is actually borrowing money in the account. Selling short ties up "buying power", but the fee charged is for borrowing shares, not capital!
FInally several times a week the account will be "marked to market" with the short balance debitted or creditted. Short interst is based on the updated short balance, NOT the original proceeds from the short sale!!!
As remate points out, the short balance on his original short poeitin is approaching nil!
"when it reverse splits, the shares are considered to be covered because they're not equivalent to the old shares. I've paid short term gains every year I've played these. vxx hasn't RS in a while... others may have different experiences, but that's been mine."
With all due respect, jc, I believe that your statement is incorrect.
I do not believe that a reverse split closes and then reopens a position.
And in most scenarios, closing out a short position nearly always results in short-term capital gains. ST vs LT cgs depends on the length of time that the asset used to close a position is actually held.
If I am short UVXY, for example, since Jan 2014, and I wish to close the position by buying shares on the open mkt, I will only own those closing shares long enough to return to the loaning broker...
In one of my accounts I bot 500 (now 1000) shares of SVXY in early 2013. I held a core position and traded short cals intermittently against those shares.
At year end, I had a neat $20K unrealized gain.
But my K1 showed a realized gain of $30K, reported 60/40, lt/st, I believe.
So now, instead of deferring cg's and taking a 100% lt gain, I must pay these taxes upfront, some st. Fortunately, I now get to increase my basis and my unrealized gain, going forward, is converted into a $10K loss!
Your presumption is correct, nt.
I had received several volatility K1s for positions in which I was short.
I phoned ProShares and the person with whom I spoke verified that their computer spits out incomplete, unnecessary K1s for short positions.
No long position, no K1, no report to IRS...
"I just went online to discover that once again TVIX is up right now, while VXX and UVXY are down. What is going on with this ETN that it doesn't track anything?"
The intrinsic values of VXX, UVXY, and TVIX, not the last mkt quote, precisely track a rolling index of the front two months VIX futures, not the spot VIX, SPY, etc.
Any other expectations are incorrect....
" I have bull spread but still I don't like to loose the big in making peanuts. It's not only terrible option strategy but also poor money management . I want to sell end of apr 64s instead I did apr4 , 61s."
With all due respect, Dan, from what you write, I infer that you do not fully understand options strategies.
Max profits on a bull call debit spread will be achieved when both legs are in the money.
You imply that you sold the wrong strike and expiry for your short leg...
Are you legging into your call spreads? If so, you might find it safer if you purchase a two leg call spread from the get go. The lower your break-even, the less your risk, of course. Choose a conservative target for your short leg and choose an expiry several months out until you get a better feel for the interplay of delta and theta, in particular. Bat for singles and not homeruns.
And youtube "option spreads" to further your education. Watch the options series on Khan Academy as well!
PS -- Confucius says: Man who wears trousers too LOOSE will soon LOSE wallet!
Thanks for the kind words, Harry.
I've been asserting on the VIX proxy boards for well over a year that the safest way to bet on a general market collapse is to not to buy VXX TVIX or UVXY, not to buy a leveraged general index bear ETP, but to short a levered bull ETP. You will lose if you market continues to fly, but will win if the SPY oscillates sideways and, of course, if it plummets! The return won't be as breath-taking as the TVIX lottery ticket, but the risk and decay is diminished.
"My short svxy 61 legs I sold for 65c or now worth 2.6$ making me loose huge."
Dan, are you net short SVXY calls or do you own bull call spreads? In the latter scenario, the gain on your long calls should exceed the loss on your short legs and your concern is moot.
PS: If one is careless with money management and LOOSE with spending, that person will most likely LOSE money in the long run...
"I have sold out of the money SVXY calls for close to a year now whenever the VIX gets down here. A few months ago, the VIX term structure got really flat and muted the contango/backwardation effects. This is a buy down here and I will add if the VIX goes lower. "
xt, I partially agree with you.
I, too, like to write OOM SVXY calls when the VIX drops below 13.5. But I write them as a hedge against my permashort TVIX position.
Being long TVIX today, imo, is exceptionally dangerous.
☢ With just 2 wks to futures expiration, spot to May contango is extremely rich again. If the VIX sits at 13.5 at expiry, look for May futures to fall to ~14.5, more than a 6% drop. In this scenario TVIX intrinsic value will drop 12%.
☢ The premium to intrinsic value has recently expanded to 5% and intraday iv quotes are no longer readily available. If the premium shrinks back below 2%, "investors" will suffer an additional 3% loss.
"Last big volume moved it much higher..thoughts?"
Yes, I think that you are a paid tout...
"I'm curious as to what everyone's thoughts are on what price would be the next reverse split, when that might happen and why? I'm new to TVIX and don't want to get in and the stock go down to 4, reverse split to 40 and then start the downward trend again."
With all due respect, rm, splits are moot.
An "investment" in TVIX will decay equally with or without a RS. If you are "new", you are best off to remain a stranger to TVIX.
" ^TVIX-IV, has not been updated since 3/21!"
CS updates intrinsic value daily eod on its website.
Neither T! Finance nor Fido have provided real time iv's since 3/21...
"Typically TVIX and UVXY follow each other perfectly and they both have 2X the gain or loss of VXX. But, today TVIX only dropped -3% while UVXY dropped -6% and VXX dropped -3%.
Why is TVIX broken today and not tracking UVXY and the future options like it should?"
No, Greg, TVIX and UVXY never track each other perfectly because TVIX trades at a fluctuating premium and UVXY trades at par to intrinsic value/nav.
You would be absolutely correct to state that the day to day, minute to minute, percentage changes of TVIX and UVXY intrinsic values correlate exactly and are 2X the percentage change of ^VXX-IV as well.
TVIX appears to be "broken" because its premium has suddenly jumped from 2% to 6-7%.
Something strange with TVIX began 2 weeks ago. The TVIX intrinsic value, ^TVIX-IV, has not been updated since 3/21!
Unlike UVXY, which almost always trades at par, TVIX has continued to trade at a premium to iv since the CS debacle two years ago.
Most of mid 2013, UVXY was trading at a premium of 8-10%, allowing trading opportunities based on fluctuating premium alone.
For the past several months that premium had dropped to 1-3% until the past two weeks.
I don't think that CS will allow the note to completely uncouple again, but I'll be adding more to my short position to take advantage of the increased premium!
"well its almost 3 months. I m still not ready to get in but shes a lot closer, at least now MSSD is on my close set up. and watched about everyother day.. :)"
Steve, with all due respect, why would you ever consider "investing" in Massive Deception which, imo, is an outright scam? Hasn't even filed with SEC since last August...
If you think it is "setting up" at .03, it'll be a better set up in a year at .003 if it hasn't been delisted first!