iPath S&P 500 VIX ST Futures ETN Message Board

Oh it'll go lower. You can bank on that. It's just that when the VIX is at such a low level, futures can't really dip much. But now that May futures have expired and VXX holdings now contain 100% June futures, which are at a $2 premium to cash, I wouldn't be surprised if we see mid-17s or lower within the next week or two if spot VIX continues to trade below 14.

I'm surprised that after trading this thing for as long as you have (I've seen you on these boards since last year), you still don't understand how this thing works. It's based on VIX futures, and right now, nearly 100% of VXX holdings are June futures, which are priced around 15, which is a relatively high premium to cash VIX... And the VIX does not always inversely correlate to the market as it is a simply a measure of options demand...

When their is little to no volatility, you want to be selling options and profiting off of time premium decay. I'm a permashort, but have been welcoming low volatility as I've made a killing selling options the past 4 weeks...

The market is not illogical. Why would you stand in front of bull train in the first place? Bull markets can last for some time. And the market keeps rising as futures earnings growth is anticipated, stocks are still at relatively good valuations, the economy is showing vital signs of improvement, and inflation and low yields force investors to take on risk (thus the rotation from bonds to stocks). Then there's the psychology of the market and many sideline investors are looking to buy the dips. Therefore, tops take longer to form than bottoms, because of all the dip buyers. So you need to be really patient waiting for that crash and at the same time, not go broke by investing in a double-leveraged decaying product. One of the cardinal rules of technical analysis is don't buck the trend. The trend is your friend (until it isn't, thus the need for proper risk management)...

That's what I aim for, basehits, not homeruns. RBIs are still points on the board, and they come with less risk...

Thanks for the advice. Have a great weekend!

Yes, selling covered puts is an almost riskless strategy, except for the fact that price can always go much lower or you could forgo a hefty amount of profit. But you will always keep the premium when selling covered calls, no matter if the options you sell end up in the money or not. If above 8, you're foced to sell you're options to the option holder at strike price, but you keep the premium, and below 8, you keep your shares and the premium...

The only issue is contango. June futures are very high relative to spot, almost 22% above spot at the current moment, and May futures expire after Tuesday. Normal amount of contango between spot and front is about 10%, so if VIX stays near its current level of 12.3, when June futures become front month, you can expect the June futures to decline in value to about 14 or possibley less, which is about a 6-7% move, which would equate to a 12-14% decline in UVXY, or roughly a value of 5. But your break even is 4.7, so you still have some cushion and should be good. I've been selling weekly 18 puts on VXX for the past 3 or 4 weeks and have made a killing. Up about 5% a week, however, with the May futures expiring and June futures well above spot, I'm hesitant to sell puts...

You'll probably be screaming it for another year or so... Even if there is a correction, it most likely won't be a panic selloff... Just reality...

Its funny how you can easily tell when someone is a newbie, or a guppy as you like to call em... Lol!

I think you loaded too much in the crackpipe... You're acting delusional...

But what you have to realize is that the only way that UVXY will shoot to the moon is if the market sells off in a panic and futures hit backwardation, which is a very, very small chance. More likely, if we do sell off, it will be an orderly sell off. Furthermore, you have to ask yourself what real threats lie out there that can bring us back into Recession, especially with the Fed pumping billions of dollars every month into the system. It's hard to fight that type of liquidity. I think your trading on pipe dreams as I used to do over a year ago, but ended up losing a huge portion of my brokerage account. This should be a warning to you if you think that you'll happen to get lucky and hit the lotto with this thing. But now I go for basehits every week rather than trying to hit a homerun every time and I'm doing much better than I could have ever possibly imagined...

"Decay has halted"

Rather it is has seemingly has temporarily paused. I suggest you do more research. Futures are still in contango and this thing is still double leveraged. Decay will NEVER halt on UVXY. Even during periods of backwardation, the fact that this is double leveraged will always result in leverage/rebalance decay. And ever heard of a bull market? In a bull market, the market can remain overbought for long periods of time and doesn't need justification to melt up, however, there is justication in the form of inflation and low interest rates and perhaps an improving economy...

Do you think AGNC is a major buy at these prices? Seems like it is after taking a hit a week or two ago and I know it didn't report that well on Q1 earnings, but it seems the dividends are still justified by its earnings...

Meant UVXY, but they contain roughly the same holdings...

VXX holdings already contain over 80% of June futures, so it's already almost all June futures and actually there are 3 1/2 more trading days till May futures expire (30 days before next month's options expiration date, which would be next Wednesday, May 22)...

Try selling options. I'm making nearly 2 grand a week just selling options...

Fact: Many have called bottoms on this, very few have been right.

And how long have you been trading this? LOL!

Hey Warlord! How are you? Are you still trading VIX futures related funds? I have to give you much thanks as I first learned about contango in VIX futures from your posts on the VXX board. I have made back a significant amount of my market losses thanks to the knowledge I acquired from you. Anyways, hope all is well...