GS was actually one of the first brokers that supported that new exchange, IEX, that makes it impossible for high speed brokers to skim profits from your trades called front running because they considered it unethical and wanted to guarantee the best deal for their clients.
What is VIX?
VIX is an implied volatility index. It measures the market's expectation of 30-day volatility implicit in the prices of near-term S&P 500 options. VIX is quoted in percentage points, just like the standard deviation of a rate of return, e.g. 23.26. CBOE disseminates the VIX index value continuously during trading hours.
VIX futures (VX) are standard futures contracts that cash settle to a Special Opening Quotation (SOQ) of VIX. VIX futures are therefore contracts on forward 30-day implied volatilities. For example, in March, a May futures is a forward contract on what 30-day implied volatility will be on the May expiration date, and a June futures is a forward contract on 30-day implied volatility on the June expiration date.
So the way I understand this, VIX futures are contracts based on the VIX which is the implied volatility of S&P 500 options contracts. But these futures contracts can be bought and sold so their price can go up and down as well thus they have their own implied volatility.
So basically the a VIX future contract has an implied volatility of the implied volatility of the volatility of the S&P 500. Thus you have two levels of implied volatility involved. Very messy.
I wanted to point that out because someone might say in reply to me that the VIX is the implied volatility but that is not what I am talking about. I was talking about the implied volatility of a futures contract whose underlying is the VIX. That is different. So basically the VIX can go up but the VIX futures contract can go down.
I point this out because many see the VIX go up and see TVIX go down and wonder. This is why. It is because the implied volatility of the futures contract declined.
And from what I can tell, I would say that 90% of TVIX investors on this message board have no idea what I am talking about however it is essential that they do if they are invested. Otherwise you are completely in the dark.
This kind of comment comes from someone who sees the market going in a different direction than they thought it should because of how it behaved in the past. However the market is always right by default. So the problem is not with the market but with the thinking of people who think it should behave differently. It is pretty obvious to many of us that if the Fed. has changed the way the market behaves then it is up to the investor to take that into consideration and then to alter their approach accordingly. So if the investor fails to do this then it is not the market who is flawed but the investor for not considering everything that influences it, like the Fed.
You can not blame someone for a market that behaves differently than you expected if what they are doing that has an influence is legal and everyone is aware of it. In other words, there are no secrets being kept between a select few investors who would benefit from them. Some people may profit from insider information but not by enough to cause the entire market to move. These isolated incidents are in the noise. Big players like the Fed act openly with everyone aware of their actions. So if you ignore what they are doing you cannot put the blame on them. They did nothing wrong as far as wall street is concerned. All you can expect is that they act openly so you know how to respond which they have. The fact that you didn't respond correctly isn't their fault.
It seems like you are addressing stocks in general. mREITs on the other hand really don't do what other stocks do. They respond to interest rates as this impacts book value and profitability, regardless of what the rest of the market is doing.
On another note, I have been making most of my money lately exploiting these small corrections by shorting the VIX once we get close to the bottom of the correction dip. I'm making more money on this alone and than all my other investments combined. On a typical correction I make 50% to 80% return on investment. It is like free money. And to think that somone is on the opposite side of this trade. No wonder there are poor people. Mindless investors.
They don't understand this. They are just repeating what they read in an article. If they could do the math they would realize that they lose so much in TVIX that it makes its use as a hedge pointless. They go from the possibility of losses to guaranteed losses.
The Fed comes out and says that due to optimistic jobs data that they may start raising rates sooner than later and the mREITs act like it was never said. That is not what I would have expected.
Keep in mind that when the Fed prints money it forces our trade partners who are manipulating their currency relative to ours to have to buy more dollars and stash them in order to keep their valuation low. This is killing them and it works in our favor. We have untentionally delcared a currency war by flooding the world markets with dollars. So to your point we should be the last to fall because we are the winners at this game.
I make money on this stock consistently but I only sell it short. It is the easiest way to make money in the markets that I have found. Just start shorting when the VIX shoots up because of some event and keep shorting until the VIX starts to decline again. Then just kick back and ring the register on contango decay. Works every time. I have never lost a dime doing this. Well, except for the first two days or so that I am starting a new short position but that is only because you cannot know when the peak is going to occur so you have to start a little early to make sure you catch it. Otherwise it might pass you by.
I also buy SVXY at the same time I am shorting TVIX.
The interesting part about this stock is that a few of us shorts who have been making money doing this keep telling the longs who keep losing money about how easy it is to make money on the short side and they still keep buying it long. I think you need a PHD in psychology to understand why because there is no logical explaination that I can think of for this kind of behavior. It is like lemmings running off a cliff. They keep saying they are going to make money and then you never hear from them again. And I don't think they disapear because they became millionaires off of buying TVIX. I can pretty much guarantee that.
Stimulus trickles down to people who own a lot of stuff. It doesn't fix anything. It only sustains what already existed. To get the middle class jobs back you need new policies. Unfortunately it is more fun to play golf than to confront the Chinese.
Good luck with that.
The rich people in Russia, you know, the ones that give Putin his power, have been getting hammered by sanctions. Lets see how long he can last when everyone who supported him starts to pull back. He is costing the people who control the puppet strings a lot of money.
That would be impossible. You cannot have an investment that is based on buying futures options that goes up with time because options lose value with time. It is built in. Because that is how the people who sell the options make a profit. TVIX will act the same way that it has in the past forever into the future because that is the nature of the investment.
I am amazed at how people can invest in this ETN and know nothing about its underlying investment. How can anyone invest in something they do not understand?
This is the kind of post djh11252 should be paying attention to. But I'm guessing that he ignores these post and pays attention to the ones written by the people who are losing their shirts.
TVIX doesn't have sell offs because it is a tracking stock. It tracks the VIX futures. So there is no such thing as a TVIX panic sell off. You have imagined this.
I guess you did not read the part where buying TVIX is like buying a stock option. It loses value with time so if you don't buy right before the next peak then you will lose more than you can make. Normally these peaks come 4 to 6 months apart so since we just had one it would seem to me that the last thing you would want to do is buy now.
Have you looked at the 2 year chart? Apparently not. Because if you did it would cry out to you that this is a stock for shorting only, not buying. Everyone who is making money on this stock is shorting it. Everyone who is buying this stock disappears in a month or two never to be heard from again. So what do you want to do, make money or become one of those who goes poof?
I'm convinced now that I understand exactly why there are poor people in the world. And it is not because they were not given the same opertunities as others. Clearly that does not matter.
Just to be clear, we are actually glad to see more longs who will buy shares so we can borrow them to sell short. And for that I thank you as well. Please feel free to buy boat loads of TVIX. Your support is appreciated.