It is not just "you, i.e. Fedrally" that is going to be "limited" by the market at a $1B. By the time you are up to a few hundred thousand dollars, say a $1M, the total market is likely several tens of billions... and there is no meaningful profit being made from VIX anymore.
I have made some money from both SVXY long and SVXY covered calls this year. That does not mean I will ever think, much less believe, that you can generate billions a month from the VIX futures market. You can buy/sell all the futures and options you want, but if you try to "too much", the mkt will adjust your buying and selling prices to deny you a profit.
People, and increasingly, computers, buy-sell all day. Don't look at volume. Look at outstanding. Moreover, this number is ALL options (calls, puts, all strikes, all expiries, including weeklies, monthlies, and leaps). Even among the options, many are so far out-of-money that they will never be traded again.
Oustanding M1 futures are settled for cash on the day of expiry. The outstanding futures number is the only number that matters... During that time some of the outstanding options that are in the money will also make some money.
Don't confuse volume with outstanding. And don't confuse M1-M2 futures with all-strike,all-expiry options.
Check this link http://www.cboe.com/data/mktstat2.aspx that tells you open interest on VIX is 4,729,012 (calls and puts) and daily trading on a thin day 287,249 (that is one day ahead of a holiday).
Fedrally, don't look at the OPTIONS for VIX. We are talking - so far - VIX futures. When and how did you switch your thoughts to VIX options ?
Anyways, your options number includes all options - calls AND puts, ALL strikes, tens of months, several weeklies, everything... Options are played with pennies, and almost always a losing game, right ? Were you going to make your promised trillions from VIX OPTIONS ?
In the age of high-speed trading, volume means NOTHING. The outstanding number is what matters anyways. Who is talking about options anyways ? Are you hoping to make trillions (as per your wet dreams) from VIX options without trillions being invested in VIX futures ?
Here are the December 2014 and Jan 2015 VIX futures.
http://cfe.cboe.com/Publish/ScheduledTask/MktData/datahouse/CFE_Z14_VX.csv (Dec 2014 VIX Futures)
http://cfe.cboe.com/Publish/ScheduledTask/MktData/datahouse/CFE_F15_VX.csv (Jan 2015 VIX Futures)
Can you answer just the following :
1. Is any of the data I mentioned not a "fact" ?
2. Are the ETF/ETN's only a fraction of the VIX futures mkt ?
I am doing just fine, with modest expectations and reasonable success with SVXY. I will never expect to turn $1K to even $100K, let alone $1B through SVXY (or even trading VIX futures on my own). Because there are 1000's of people thinking of making money from SVXY, not just myself.
There has been a constant dismissal of the idea that VIX ETF/ETNs can influence VIX futures pricing. The wishful thinking is that the VIX futures mkt is MUCH bigger than the ETFs/ETNs, so the term structure is never influenced by these funds.
Here are the facts for Dec 2014 VIX futures (as of 11/25/2014). Values are approximated and rounded
Outstanding : 165000 contracts (actual, from CBOE site)
VXX holdings : 50000 contracts (estimated, based on VXX fund value and M1-M2 ratio)
UVXY holdings : 42000 contracts (actual, from fund manager's site)
TVIX holdings : 45000 contracts (estimated, based on fund value,
similar fund size and identical roll pattern as UVXY)
VIXY holdings : 5000 contracts (actual, from fund manager's site)
These four funds alone hold nearly 85% of Dec VIX futures outstanding !!!
All the portfolio managers who generally hedge stock portfolios, fedrally, bobwins, joeydork, ... and everybody else that do their own VIX futures trading comprise the remaining 15%.
GO, VALIDATE (or CHALLENGE) THE DATA, UNDERSTAND IT, AND SHUT THE F**** UP !!!!!
IF YOU COULD TRADE INFINITE AMOUNTS OF VIX FUTURES AND GROW $1K to $1B in 10 years (as per the wet dream of Fedrally aka bobwins) why do you think the likes of Goldman, Morgan-Stanley and the hedgies even bother to keep and pay their employees billions a month to build diversified portfolios that often lose money ? Why won't they just set up automated VIX futures trading and earn hundreds of billions a month in guaranteed profit ?
Just take the data from CBOE on the daily outstanding VIX contracts (NOT the trading volume, but the outstanding VIX contracts) and tally that up against VXX holdings. You would be surprised to know WHAT percentage of the outstanding M1 and M2 VIX contracts are held in VXX. Believe me, you WILL be surprised... Do yourself a favor, and then do us a favor by reporting to us what you find.
BTW, when I say total short-VIX funds or total long-VIX funds, I also mean to include non-ETF holdings.
"our" positions ? Are you the third alias of bobwins aka fedrally ?
So I guess you are playing VIX futures with about $1.5 million in the mkt ? Are you "rolling" like svxy, xiv, vxx, vxz etc. ?
Show me a time when short-VIX funds are managing 5x the money of the long-VIX funds... and short-VIX funds still continue to grow in any meaningful way.
That is the essence of my arguments. Easy to remember, so you don't get confused again about my arguments.
It is not clear from your tall claims whether you are long or short VIX . Or do you trade either side, based on the trend ?
You have been claiming that you can feed unlimited money into the VIX-futures market. Do you mean the long side ?
Do you mean you are willing to go long VIX futures with unlimited money ? What exactly is the extent of your "unlimited" money ? Is it $1B, $10B, $100B ?
It sounds like you are trading VIX on your own, without using the ETF/ETNs. Is that right ?
When you take a position approaching or exceeding $1B in VIX, can you let us know ? Then we can verify the VIX open interest. Otherwise it is just hot air.
yeah i think we can safely ignore the svxy to $1B crowd and not miss much.
Really ? Just take a look at the VIX futures open interest (not trading volume, but actual open interest) from the time before VIX ETFs were there to now. You would see a clear correlation.
Even today, add up the value of the open interest and compare that to the total value of the long-VIX ETFs. What you find is guaranteed to surprise and enlighten you. I will not do that for you. Please do it and do yourself a favor.
Just locate the CSV files showing the daily outstanding contracts by date from CBOE site and look inside. You would see a very strong correlation to the 30-day average maturity of the the short-term VIX-ETF/ETN holdings.
The VIX ETF/ETN's are not just participating in an organic VIX mkt (by "organic" I mean a VIX mkt driven by the need to hedge). Increasingly, these ETF/ETN's are controlling the VIX mkt. If Fedrally and Bobwins keep their holdings till SVXY reaches $1B/share, these ETFs/ETNs will become the VIX mkt.
Nov XIX expired yesterday... SVXY yawned.. S&P has been making new highs at least once or twice every week.. SVXY has yawned...
Whenever this kind of quiet, slow crawling-up in S&P has happened in the past three years, it has given explosive growth of the order of 15-20% per month to SVXY, right ? So, just WHAT is UP ?
The unstated factor there has been that the long-VIX funds' corpus has remained MUCH higher than the short-VIX corpus, thus providing an easy fuel for maintaining high contango.
For the first time in history, the short-VIX funds' corpus has nearly matched or exceeded the long-VIX funds. We are likely seeing the effect of that in the refusal of the short-VIX funds to just balloon higher almost spontaneously.
Imagine if short-VIX funds' corpus keep growing and someday reaches 3x-5x the long-VIX funds' copus. What will that do to your wet-dreams of $1 billion/share of SVXY in 20 years..
NOTE : However, if we continue to see outflows from short-VIX funds and their sizes remain a fraction of the long-VIX funds, the growth in short-VIX funds will become much more spontaneous.
The spot VIX is not tradable. Spot VIX is just a calculated number based on actual S&P options pricing.
Only the futures are tradable. The time value (if you will) of a future - that is the difference between the future's price and spot price - is going down gradually. On the day of expiry, the future is settled for cash value equal to spot price. The time value is more often positive, but it is not uncommon to see negative time values too.
Futures do go down usually on Friday, because on Monday morning it will be three days less remaining in the life of the futures.
And would those strategies produce money for you WITHOUT SOMEONE ELSE LOSING THAT MONEY on the other side ?
WHY would the big boys (or whoever) want to buy 100 times more VIX futures than they are doing today ? Unless the S&P market cap increase 100 times, why would the long-VIX mkt grow 100 times ? Especially knowing well that a long-VIX position is a decaying asset over time ? Unless you have a house that is 100 times more expensive, you won't pay an insurance premium that is 100 times more... would you ?
I will separately post a link to a CBOE spreadsheet showing the outstanding Nov VIX futures on a daily basis. You would be able to see how the outstanding volume peaks just about a month before the Nov VIX expiry. So much for the "big boys" theory.. The tail is wagging the dog. Get real, guy !
I don't know what knowledge you have, that I don't have... I would love to learn if you give me your knowledge.
I have no problem in believing that you might have made 700% - from 10K to 70K or even 100K to 700K. I have never diputed that.
My point is, it is NOT scalable. If you had invested $10B in short-VIX (does not matter if you bought SVXY, or XIV, or used your own VIX trading), do you think you would have been able to grow it to 70B ?
That is where you and I fall out with each other.
For the first time in history, the short-VIX funds total sizes have almost caught up to the long-VIX funds. Let the total of short-VIX funds grow to 5x or so of the total of long-VIX funds.. IF AND WHEN that happens, let's re-convene and see how contango is behaving.
I haven't owned this stock for very long. I had it for a short while in Sep. Wrote covered calls, and got assigned. I just re-entered today.
I am aware of the macro events that you are referring to. I don't think Fed can be blamed. Mkts are making new highs almost daily. Oil, sure, has a role.
The analysts' 12-month target shown on Yahoo continues to be ~$18. Is it actively followed by analysts ? Is that a credible target ?
What about CSIQ and SPWR ? (I can perhaps research them, but if you can share them in a brief manner, I would certainly appreciate )