I also play UVXY puts. I normally enter whenever there is a false spike I the VIX (like the worry about the debt ceiling) and hold them for about 1-1 1/2 months.
Great gains are captured.
t's just too bad that this only happens a few times a year!!!
I cashed out my large position. I am more than satisfied with today's gains!!!
Monday is normally a little bit of a down day (for the morning0 and will try to buy back at a cheaper price.
I would take your best guess any day.
Looks like your year end projection is going to be better than mine (138 versus 125), as I don't think we will have December tapering and thus SVXY has room to run.
I agree she has to, but she must get everyone else to agree (like Bernanke did).
I don't think we will get any tapering until March or so.
February is the debt limit and I doubt that the FED wants to taper in January with this over looking us.
I will give you a thumbs up for that.
I have noticed this for almost the entire year.
Have a great weekend!!!
That means SVXY will be north of 300.
Just yesterday you were agreeing with Bustin about a possibility of 220 12 months from now.
Too much enthusiasm????
Even though I like your enthusiasm, I seriously doubt you can count on these returns year.
I would extremely happy with an average of 50% returns on this each year
Has their been any historical research on what the normal beta decay for SVXY is for a rising, falling or flat stock market or futures?
Just curious how you chose the 4% level.
I appreciate your clarification.
As Bob mentioned, I think everyone would be more than happy to have SVXY at $220 in 12 months.
When you talk about Beta decay, are you saying that you expect the spot VIX and the VIX futures to go up by 3% per month?
If so, by end of the year spot vix would be at 19.25.
This seems a little too high for my beliefs.
I did not know that you and your wife were expecting another child.
Congratulations and may the baby and your wife stay healthy!!!
I normally buy options only on UVXY.
I buy them after a spike in the vIX and hold them for about 1 1/2 months or until spot vix goes back down to about 12-12.50
I sometimes buy options near future expiration where I see a large spread between spot vix and front month VIX and I feel that spot vix will stay at least constant for the next few days.
The longer options are normally out of the money options and the shorter options are in the money options.
Are you serious of thinking about SVXY at 295 next year end???
I would think maybe 200 or so. I just can not see another 100% return, especially with tapering and maybe the market taking a correction.
That is correct.
However, ETN's pose the issue of counter party risk.
Lehman was a big backer of ETN's before they collapsed and their ETN's return pennies on the dollar.
Last item, look at the CBOE website you looked at yesterday.
It has December futures at 14.21 down 4 cents
It has January futures at 15.37 down 3 cents
You can see that the change is wrong through the other websites, as well as from my posting last night.
Best to you,
SVXY is taxed as a Partnership. If you buy the shares in a taxable account, you will have to complete several additional tax forms. I made this mistake last year and the extra time and effort was unbelievable.
I will never invest in a partnership in a taxable account again.
I buy my shares in a qualified retirement plan (self directed brokerage account), as well as in an IRA. In my taxable accounts, I play options on UVXY and SVXY.
Good luck on your trade. You are up so far. Key item will be the jobs report on Friday and whether this will lead to Fed tapering this month. In my opinion, the answer to this question will lead us to where SVXY will be at year end (your $138 per share or my $125 assuming that we don't get LARGE tapering this month to drag the price down to $110 or so).
I have seen the problem several times.
The problem is not with the closing prices, but with the changes in the closing prices.
If you access the website through other channels you will see:
December 14.61- up 31 cents
January- 15.48- up 28 cents
Note that there has not been any contango between spot and front month for 2 days. Thus, as spot increases, so does front month