People investing in equities now are hoping that the good times continue.
To me, it looks like trying to pick up pennies and nickels, while a steamroller is on its way.
The key question, is "When does it arrive?"
That is why I cashed in my SVXY last week and will only go into the fund on short term VIX spikes (bought on Monday at $58-sold yesterday at $61 for a 5% gain).
I agree with you.
Too many people are trying to naked short VXX or UVXY and they can be ruined by the spikes.
I am sorry if this happened to you.
I have 2 separate accounts that I trade with (one is a self directed account within a 401K plan that does not allow options).
In my 401K account, I had closed out my SVXY about a week ago and was sitting in cash. I bought some TQQQ and UPRO Wednesday through today.
In my other account, I sold covered calls against my SVXY (march $65 strike price for $2.50 each). I am hoping that within the next month, SVXY stays at least in the low 60's and if it goes above $65, I will let my shares be called away. (I end up with a very nice profit in this case).
From my technical analysis thoughts, it will be interesting if we can pass the all time highs today (S & P).
If not, I can see us revisiting the 1800 level in the next week or two
Thus, long term volatility would be alot safer than the one month out.
The current leg down did not continue and we reversed a good portion of yesterdays loss.
With this action, the short futures were the place to be today.
I like the longer dated futures when the spot VIx is low and we have good contango.
Best of luck.
I own some options on TQQQ (loved today's action). Use to own UPRO
These are leveraged ETF's (3 times) and definitely can juice the returns.
I find SVXY better when we are in a slowly moving up market, vix is high and dropping (SVXY will beat these hands down).
The other two are good on an uprising market when spot vix is already low and the best we can expect from svxy is the contango (worst is an uprising vix futures that eat away from the contango).
Different products for different markets.
If you guy want to talk some serious trading and get out of this mindless drab, I would welcome you all on the SVXY message board (some of you are already posting there).
Also, if you want to compare your trading style with other serious investors, I would suggest that you go to seeking alpha (free) and look for Rock228 articles (most recent and his instablog).
He has a good handle on timing volatility trades and others posting have some great ideas. Check out his "What New" recent article and all the comments.
I would welcome you all to join us.
The low came on January 22nd and the Spot Vix was at 12.55.
If the Spot VIx goes to this level again, I would anticipate that front month futures would be about 13.75 and UVXY would be about 53.
This additional drop from its all time high is the value of one months contango.
We may see this price in the next few days (imho).
I wish you the best.
I got very tired of all the garbage on this message board, so I don't read most of it and very rarely post.
Best to you,
Sure hope so.
Would love to see Spot vix in the low 12's (or 11's) and Vix! & Vix2 to follow strongly downward.
While VXX dropped by 66% for 2013, you have to realize taht spot vix dropped from 18.02 (12/31/12) down to 13.72 (12/31/13)
In my opinion, we will not have a 24% reduction in spot vix from here to January 2015, so it may be hard for VXX to get down to the $20 level by option expiration.
I just put in an order for 100 puts, strike price $37 puts, expiration 2/28 for 5 cents.
So far 81 was filled. Hopefully the other 19 gets filled later.
Wishing us both luck!!!!
I like the idea of spreads on further out futures.
Can capture 3-4% per month and cover your position when they are about 3 months out.
Beats the cash return!!!
Look at his article dated January 1, 2014.
Title is VIX Futures Term Structure in 2013 looks a lot like 2012