Every time it gets to about $2 they do a 10:1 reverse split at which time it is about $20 and then they start all over again. It never ends.
I love this stock. I have made more money shorting this stock than any other investment I have made. This is a dream come true.
As long as the longs keep buying I will keep shorting.
I love this stock. I have made a 60% return on investment since Feb. You need to be on the right side of the trade. Just look at the 2 year chart and you will see what side that is. It is a complete no brainer.
I am unfamiliar with this boxing concept. One thing I have done is short two leveraged EFTs, one the inverse of the other, and made money off their average erosion. But the profits for doing that aren't anywhere close to what they are for simply shorting TVIX. Now that I know how bad of an investment these volatility ETN / ETFs are I will play with them for a while.
I also buy long SVXY in my IRA accounts since you cannot short in an IRA. It is an inverse volatility ETF so it makes money on the long side. Unfortunately they do not have any leveraged inverse volatility ETFs. I make about half as much owning SVXY as I do shorting TVIX. If longs quit buying TVIX so that there are no longer any shares left to borrow then I will continue to buy SVXY. But as long as people keep buying TVIX I will keep shorting it. I have a lot more money in my main IRA accounts so my SVXY exposure is actually much greater. In absolute dollars I make more on it because of that. None of my other investment even come close to the level of profits that these ETFs provide me and some them are pretty good, like GILD.
These volatility ETFs are a gold mine. It seems like nothing else beats them. In fact I read that SVXY was the best performing ETF over the long term and that was a buy and hold scenario. I make even more getting in and getting out. You can get rich off of these things. I wish I knew about them sooner.
I found out about TVIX when someone posted that they were buying it on another board. I looked at its chart and I thought "Buy it? I'm shorting it." Shortly thereafter I did a detailed study of all volatility ETFs and why they did what they do. There is a lot written on this. There is no excuse for losing money on these things. You have to be the type that does almost zero research before an investment to be in that category. I am amazed that anyone would buy TVIX. I have never bought it. Not once. I am not that inexperienced.
I recently did an analysis and concluded that it makes little difference if you cover or not between VIX peaks. It is a wash. So I have concluded that I will do whatever makes me feel better at the time and leave taxes out of it.
In my analysis I always add more shorted shares at each VIX peak. I don't simply let the initial investment ride until it goes to zero. That would not make sense. You need to reinvest your profits at each VIX peak or you cannot keep growing.
On some VIX peaks the decline in TVIX was not enough to justify a cover beforehand. On others the decline was over 50% and thus covering would result in significant profits.
It would be interesting to do a third analysis where I covered or not covered based upon the degree of decline between peaks. Maybe there would be something to learn from that.
It seems that recent comments from the Fed are designed to do everything they possibly can to assuage investors into holding onto their shares. This has caused volatility to decline. Because of this I am no longer sure if the VIX will reach my VIX 20 trigger point that I use to enter a new short position any time soon. This last tech sell off didn’t seem to have a very large impact on volatility as one might have expected. But I won’t open a new short position in TVIX until the VIX has had another peak so I am just waiting while I let my old short position continue to make profits as TVIX moves closer to zero. If the herd starts to act like it is ready to stampede off a cliff I will cover.
They will never shut it down because it does exactly what they said it would do. The SEC has already confirmed this with a statement. The SEC said it is not up to them to monitor the quality of investments, only that the risk are properly disclosed and the SEC has concluded that they did that for TVIX. You cannot own TVIX for more than a week and make money doing it and they disclose that this is the case in so many words.
The people shorting TVIX have rarely lost money. Mainly because you know with 100% certainty that it will go back down and thus all you have to do is wait if you short too soon.
However if you are long and wait you still lose because of the price erosion. Waiting will not result in the long recouping their losses. It will only cause them to lose more.
It amazes me the quantity of people that don't come to this conclusion rather quickly simply by looking at the two year chart. How is it not completely obvious? Then one has to ask the question that if it is not obvious to them then how did they ever make enough money to invest in the first place? You would think that anyone who could not figure this out would only be worth minimum wage. I don't get it. My guess is that they are government employees that are protected by a union. Nothing else makes sense.
I did a scenario study using old VIX and TVIX data from yahoo going back to Nov. 2012. I entered a new TVIX short position whenever the VIX exceeded 20. In one case I never covered and in the second case I covered whenever the VIX exceeded 16 before the next correction and I paid taxes federal and state taxes
In the never cover case I shorted more shares on each peak by using the money from the profits from the stock price decline. In the cover case I used the after tax profits plus the left over initial investment. Note that in the cover case I was able to cover at a lower price than the price of the next peak.
There were 4 VIX peaks that exceeded 20. They occurred on Dec 27, 2012, June 13, 2013, Oct 8, 3013, Feb 3, 3014 and all triggered a short event.
On the non cover case I paid taxes in the end because eventually you have to pay taxes so that it was a apple to apple comparison.
Here are the results for an initial investment of $10,000 in both cases:
1) Never cover case: $10,000 turned into $38,066 after taxes
2) Cover case: $10,000 turned into $39,274 after taxes
It actually turned out that it was slightly better to cover before each correction, pay the taxes and reinvest the after tax profits. However this assumed that you picked the correct time to cover. If it had exceeded a VIX of 16 and you covered and then it went back down, TVIX would have continued to erode and you would be out not getting these profits. However covering has the advantage of getting out before the mother of all corrections. So you have to pick your poison. The risk trade off is the possibility of less profits for more safety.
These trigger points may have to vary depending on market conditions. In very low volatility times like this 20 and 16 seem to be good trigger points. In higher volatility times these trigger points would need to be raised. I think it would become obvious to most just how to adjust them for different conditions.
I short this when the VIX is near a peak and I suspect that most everyone else does as well. These VIX peaks are pretty easy to observe as they occur when the indexes have dropped to one of their lows during a correction and that is pretty easy to observe. It is when everyone is talking about a correction. Once the VIX is above 20 you can start shorting TVIX. Do it in stages in case it keeps going up. When it starts going down then complete your selling. I usually short over 3 to 5 days every day. On the last day I short I usually get my lowest price but that is OK because you can see it is on the way down so you can be pretty confident that those last short positions are winners.
You need some padding. I never short more than 30% of my account value. That gives me a lot of head room in case it keeps going up. The nice thing about TVIX is you know it is never going to go up and stay up like a regular stock might. You know it is going to come back down eventually. So all you have to do is wait for that to happen. Most of the time it takes a few weeks to a month. Only during major corrections like during the start of a recession does it take longer. But those are pretty easy to spot as well because there are a lot of economic indicators that proceed every recession so they are hard to miss.
I make more money on TVIX than any other stock by shorting it. I love this stock. What other stock is so good to short? It is like free money. I call it my money tree. About 4 times a year the vix shoots up and I short more. I hope it never ends.
I plan to run some spreadsheet scenarios to see if never covering or covering at the beginnig of a market correction and paying taxes is best. Covering will allow me to have more money to short on the next peak but the taxes might wipe out the difference. It isn't obvious to me without running some numbers for several scenarios and the comparing the outcomes. If I never cover a tax event is never triggered. The amount of shares I have short just keeps increasing forever and I never pay taxes. I just need to figure out if there is an advantage to this.
It will never go to zero. It will go to about $2 and the reverse split to $20. Then it will decline to $2 and reverse split again. This goes on forever.
This stock only goes up on corrections that last a few weeks or more. Those occur about 3 to 4 times a year but there is no way to predict them. If you buy after the last correction the stock price erosion is so large that the up swing on the next correction may not be enough to cover your losses that you incurred between corrections. That is why a long strategy on this stock is near impossible. The only safe play is the short strategy.
Us shorts need these longs so we have shares to borrow. For all practical purposes, these longs are paying us shorts our profits. It is a transfer of wealth from them to us. And I have no qualms about it.
You don't understand this ETF at all. For us shorts that is a good thing. I hope you keep buying. Sell your house and use all the money to buy TVIX. I highly recommend it.
It is a wonderful scam that is making us shorts a lot of money. I love this stock. The only people complaining are on the wrong side of the trade and it is there fault for choosing to be there.
They will keep reverse splitting. As long as their are people willing to buy it then it will exist and there will be shares for people like us to short.
This stock is the best investment I have ever made. On every VIX peak I short it and it keeps making me money. I hope they never shut it down. Why not get on the right side of the trade and make money like the rest of us? Why are you buying it when one look at the chart tells you to do the opposite?
This is why it is better to short an inverse etf rather than buy long the non inverse etf. For one, you pay yourself the fees. Second you pay yourself the decay.
It all depends on how much money they lose when they roll over their futures contracts. From the looks of things it seems like they have been losing a ton.
It may never be at $7 again. Only if the market has a correction and there is no way to tell when that will happen. And by that time it might be at $3 and then it will go to $6 and then back down to $2 after that before it reverse splits after which it will keep going down some more.
If you understand the underlying investment then you would say it is doing exactly what you would expect it to do which is why this stock is a gold mine. When I first found out about this stock I looked at its two year chart and I knew I could make a lot of money on it because it consistently goes down. It is like having a crystal ball. Why don't you get on the right side of the trade and make money as well? Why row up river when you can row down?