your explanation of roll yield is wrong. Roll yield (negative or positive) is from selling at a price different than purchased. This only results in the fund itself losing or gaining for tax purposes. Rolling to a higher price or lower price is just a resetting of the underlying for the fund. The roll yield only matters when longs get their k-1 at tax time. Now you actually know what you are talking about.
Decay is the leveraged effect. Contango nor backwardation is decay. I'm saying backwardation is in place so short is up a creek. Shorting dgaz heavy for next few months.
obliviously? strong buy? how do you look at the term structure of the vix and think this is a bottom. you need an abrupt selloff in the market to get this to move. as long as contango exists, and it will always in the long term with this, there is no bottom. I think you should understand this product more thoroughly before you bet long...if you think the market will selloff, you are better off buying spy puts.
is anything more hated than oil and oil stocks right now??? I'm hiding out in big oil, and have some RIG and BHI, but the action is so bearish, it's like nothing I've seen in such a fundamental part of global economics. the treasury market is not singing a tune I like either. really weird out there. January/February could look exactly like this year.
it really doesn't...I'm shorting tvix based on the nav disconnect. also shorting dgaz the last week or so...good luck vox, aapl has double topped I feel. I am totally out of aapl, even my long shares.
producing oil and gas is a similar process, and they will move some oil production capacity to nat gas. I would not bet on lower nat gas until the spring after we see what inventories are. as soon as it looked like we'd warm up last winter, we got slammed again and again. we are going into this winter in worse shape.
two months? who is your forecaster?! that's amazing forecasting! ok, i'll get my swim trunks back out, looks like warm weather through January! these draws are seriously bad the last two weeks. cold weather usually leads to colder weather. I think we see higher than $6. natural gas should be under $2 in America, but the infrastructure isn't there. storage is lower than last year, and it looks like colder winter. don't get blown up trying to bet against hedge funds that will absolutely plow into this. today is profit taking before the long weekend for most traders. you'll need oil to fall to $40 to get nat gas appreciably lower anytime soon.
uvxy is oversold?! ha! *there
...and it's a 4 week roll this time, so with the next two days off basically, and everything hinging on oil going down $15 Friday, you are playing with fire. you can't fight santa!
spot=12.25; front=14.45; forward=15.80....that's just about the worst curve you'll see. rolling up 10% day by day and spot that much lower than both does not portend good things for uvxy longs...
28% in the forward contract at 15.80...without some kind of shock this will be below $2 shortly...at least on the nav. market can price what they want but the thing isn't worth it. this is basically an call option without expiration but massive premium!
if the futures were in the single digits and the curve was in backwardation for the next few months, I would put a flyer out on a long position if we traded at a 10% discount...in a tax deferred account of course...