Are you doing any option plays for NFLX? Now that the right shoulder has matched the left shoulder, thinking about doing some March OTM put spreads.
Take a look at the previous 2 sharp declines for GILD. The recovery time is relatively quick. Call spreads are good if you are concerned about a further decline.
I did the following one year comparison:
Jan 2: 43.44 Dec 31: 31.51
Net gain of 27.5%
Jan 2: 66.11 Dec 31: 61.16
Net loss of 7.5%
For a long term position, being short VXX would appear to be more profitable than being long SVXY.
However, I noticed that for shorter periods, such as from 10/16/14 - 12/5/14, being long SVXY would outperform being short VXX.
Has anyone done a more detailed analysis of this comparison?
Thanks for all of your comments. There is a lot to consider when playing these VIX products.
Looking at the one year chart for both SPY and SVXY, May & June 2014 was rising stock prices with relatively low volatility, thus resulting in the yearly high for SVXY on 7/3/14. Even though the SPY is currently near it's all time high, the wide channel caused by the high volatility is causing a major decline in SVXY. SVXY is currently near it's low of 10/15/14 when the SPY was over 10% lower than it's current price. Obviously, there is no direct correlation between SPY and SVXY. Since it looks like SPY may be in a converging channel, we should expect a dramatic move near the apex. I am thinking of buying some SVXY calls when SPY drops down to the bottom of the channel.
Take a look at this article "WTI caught between rock and a hard place", Feb 20, 2015
The article shows a chart with the Slow Stochastics (8,3,3) of WTI currently near it's bottom.
While not exactly the same as USO, it should be close enough to trade off of.
WTI is currently in an ascending triangle, which is a bullish pattern.
The author suggests that WTI being near the bottom of the channel, presents a trading opportunity.
USO is now struggling to stay within the 18/20 channel. This trade has been good.
Lets see if 18 will hold as support.
Options expiration is probably having an effect on the price of USO.
Just last month, WTI was briefly higher than Brent. As the spread gets wider, the trade will be Long WTI / Short Brent. This spread will eventually have to narrow. It should not come as a surprise that the OPEC countries will be holding a huge number of WTI contracts when they are ready to announce a cutback.
Goldman tends to overshoot their predictions.
This was their prediction from 2008:
"Arjun N. Murti remembers the pain of the oil shocks of the 1970s. But he is bracing for something far worse now: He foresees a “super spike” — a price surge that will soon drive crude oil to $200 a barrel."
The Brent / WTI spread is now around $10. This is down from $13, but is still abnormally high. The big money is probably playing this spread trade.
This is an article about the VIX in the new issue of FUTURES magazine.
Just search for "vix is coming of age" if the link does not work.