The last time I did not think it would make it to 20 so I started shorting at lower VIX values. This seems different. The confidence that the market had before is not as strong today the way I see it. To many doubters. Many more people are concerned about a correction than before. This will cause more people to go to the side lines like I have done.
Impossible to know. All I know is that eventually this thing always comes back down and goes lower. So I try to short it on the peaks. I'm still waiting for a higher peak.
Most of the people who make money on options are the ones selling the contracts because they have time on their side. But you have to have deep pockets and the constraints that they place on retail investors forces you to tie up so much money I am not sure it is worth it.
When you short TVIX on the other hand you are like the guy selling the options contracts but without the constraints. It is a way to be a contract seller without tieing up more money than you have invested. Also you leave the details of rolling over contracts to the ETN so your life is a lot less complex.
The people buying options may as well be donating their money to the contract sellers because eventually they get it all, like the casino.
You were exaggerating. No one has 20 to 50 perfectly timed trades in succession. How do you think they caught Madoff? Because he had success rates like that and everyone knew that it wasn't possible. Because you can do everything right and an unforeseen event that no one could have known about will occur out of the blue and even the smartest people lose. The smartest investors lose all the time. They just win more than they lose. No one has that high level of a success rate.
If you think that the market is going to crash, TVIX is not the way to play it because it's underlying is an options contract and thus it loses value with time. You are better off shorting an index ETF because if the market stays flat you lose nothing. Where as if the market stays flat TVIX drops. TVIX only works if you can predict a correction no more than a few weeks before it happens and most rarely ever do that. They buy too soon and then even if a correction happens they are lucky just to get back their losses.
The other caviet is that TVIX is only at its peak for a day or two and then rapidly drops back down to where it was. Most longs hold too long and lose most of what they gained. But what is bad for the long is good for the short. That is why the only people making money consistently on this stock are the shorts. The longs have lost money consistently on TVIX ever since its conception and that will continue to be the case in the future. It isn't going to start acting differently. It will continue to have these very short lived spikes that will sucker people into buying and then it will continue to decline. That will never change because that is how futures options work.
I don't like how the market is behaving. A lot of people have been waiting for a correction. It is starting to look more and more like a self fulfilled prophecy. Nothing is behaving like it is going in a confident direction. The market is harder to predict. So I thought I would sit it out for a while. I would not be surprised if we are at a top. only time will tell. Better safe thane sorry.
All the longs who buy this stock lose all their money. The only long term posters on this board are shorts. The longs all disapear. It is a consistent pattern. And you too will disappear.
The underlying is invested in futures contracts which have time decay price erosion. Thus it has to go lower. It only spikes up temporarily and then continues to erode. that why the only people making money are the shorts.
sorry to pop you bubble, but the only people making money on this stock are the ones shorting it. And all we ever wonder is who would be so dumb to buy it. And this has been going on for years. But the longs only last a short time because they run out of money.
The market has predicted correctly that none of these threats have had or will have an empact on the US economy.
People always want to blame the man behind the curtain when things don't go their way because their overly simplistic analysis predicted the wrong outcome. It is not the rest of the world that is at fault. It never is. And all anyone does by assuming such is postponing the day when they finally see things for what they really are and start making profitable decisions as a result.
There is no use to hanging on. Markets have heard what they want to hear on interest rates and companies are buying back their stocks at record levels. And this current bread of investors is clueless about valuations, just like in the 1990s. Not quite that bad but still complacient.
The only familiar names are the shorts, the longs all run out of money. None of them have been here more than 6 months and that in of its self should be enlighten to them but so many need to get crushed to learn.
Same here but replace XIV with SVXY. They are identical. Short TVIX in my cash account and long SVXY in my IRA account.
Yes, the Fed leaders meet late at night in a dark corner of their building and plot how to get TVIX to go lower. Your theory is so sound that it is scary. Do you believe in ghost as well?
My guess is that for some reason the volatility futures were over valued which means that there is a lot of room for them to drop. But I am not an expert on day to day movements in the futures market. I look at the long term trend and invest on that. That trend is definitely down.
I can pretty much guarantee that most longs let these peaks allude them so even if they had an opportunity to make money they rarely do because they keep thinking it will go higher until they lose all the gains they had made. That is the problem with the long play, which is your sell point has to be timed to within hours which is almost impossible to do. Thus they walk away from the table a loser.
Good luck with that.
Actually, I think a bigger concern is how we are going to get our astronauts down from the space station if Russia says they won't send a space ship to retrieve them. But the markets won't care about that because if it does not impact the profits of US companies the market could care less.
I thought the fed already said it wont raise rates until 2016. So what can they say that would #$%$ investors?
The employment situation is still abismal. There are many millions who cannot find jobs that pay anything close to what they use to make. Most of the employment gains are for minimum wages jobs that no one wants.
Unfortunately the Fed. cannot fix this because these people lost their jobs to China and thus we need new trade policies to get those jobs back, something the current admin. seems to mistakenly believe that the Fed can accomplish on its own without such trade policies so they aren't even seeking a solution that would actually work. Thus we remain in limbo and the Fed keeps pumping money to make up for a lack of a real solution and they will continue to have to do this until we get new leadership that addresses the problem directly. The only way to solve this is to confront the Chinese an thus force them to float their currency so that the trade comes into balance as it should.
Obama is not going to do this. I don't even know if he understands his role in it. Has he even given it serious consideration? Probably not or you would have heard them discuss it. So you have at least two more years of lower interest rates as we wait for someone who will solve these problems directly. And even then it will take a few more years for the benefit of balanced trade with China to impact our jobs situation.
Basically there is no reason for the Fed to raise rates soon. So why would they?
It is because tech stocks are getting hammered. Too much froth. The question is how long will it last. Look at TSLA.