Here is an article about how to profit from selling UVXY short over the long term:
"UVXY: How One Can Profit From This VIX ETF"
This article explains what happens to the options after the reverse split of UVXY:
"UVXY: A Reverse Split Of Shares On This Volatility Product - What Does It Mean For You?"
Just the announcement of a reverse split may have an adverse effect upon the time premium portion of the options. A lot of traders will not want to hold onto them after they become converted to special options. The regular options are sometimes difficult to trade due to the wide bid/ask spread. The special options will probably be worse.
With my current broker, 100 options would cost me $55 ($5 + 0.50 per option).
I heard Options House has a plan where 100 options would only cost $23.50
One problem with trading UVXY options is that the pricing are in increments of 0.05
Another problem is the wide bid/ask spread. For example, 15/25 for the Dec 18 puts. This could prove to be a problem, especially if you are trading large lots.
If I decide to open another account with a deep discount broker such as Options House, I am thinking of doing large trades in perhaps the QQQ. I like this because the options trade in one cent increments. The bid/ask spread are also only one cent apart.
I recently bought a gift card from Neiman Marcus and paid for it by cash. The sales clerk insisted that I give her my driver's license. She said it was store policy. They want too much info on their customers.
I had refinanced my home mortgage a few years ago. They asked for just about every conceivable info about my life. I am concerned about how all of this data is stored. What if the mortgage company goes out of business. Are they then going to take all of this personal financial data and just throw it in a dumpster?
Today I did a side bet by doing some March 19/15 bear put spreads for a debit of 2.07 This is a good play because the drawdown is relatively small, even if the share price were to rise a few dollars. The March options should give you enough time for any correction to play through. A share price of 15 by March exp should be a reasonable target.
He did this to avoid double taxation. There is no corporate tax to pay.
Also, in a normal Master Limited Partnership, a portion of the dividend is considered to be return of capital so it is not taxed. Shareholders will need to file a K-1 tax reporting form. Not sure if IEP is setup in this manner. Has anyone here had to file a K-1 form?
Since the average volume is relatively low, it would be easy to control the price once the selling has subsided.
One of the advisors had recommended buying IEP at 110. Yesterday's low was close enough to the target to initiate buying. Icahn is not going to let this drop below 100, especially if he has a credit line secured by his shares. If you look at the options, the bid size for the calls are huge compared to the ask size. This means a lot of investors are looking to get back into IEP.
And he has not taken out any profits from Icahn Enterprises.
He has done everything a CEO should do. He sold the offering at the highest price possible. In a similar manner, he would have an obligation to buy shares back at the lowest price possible should he ever decide to do so. I could see him doing this when the pps drops to around 100. Knowing Carl, he would make a big public announcement and this would create a bottom. Even if he did not have the cash, he could still buy calls to lock in a purchase price and this would have the same effect.
Article by Forbes contributor Larry Downes
This article predicts that Best Buy will be out of business in a few years.
What is interesting is that this article was written in Jan 2, 2012, nearly two years ago.
The share price of companies like Best Buy and Sears are not determined by their fundamentals.
I am thinking of doing the long March 10 put / short March 50 call for a net debit of close to zero when done as a spread.
Also, the long Jan2015 5 put / short Jan2015 90 call for a net debit of close to zero when done as a spread.
The drawback of options having a wide bid/ask is that this may cause problems in your margin account. Even though I may be getting a good price when done as a spread. my account will be showing a loss due to the wide bid/ask.
Does anyone here understand how they work? Their value appears to fluctuate huge amounts every day.
This is unusual. Vxx and UVXY appear to be forming a bowl shaped bottom. This is normally a very bullish pattern. Maybe traders are expecting a down market next week. I am being more cautious by reducing my put positions in UVXY.
and call it "Amazon Dollars". The Amazon Dollars could be used to transfer money between individuals having an account with Amazon. Also, Amazon could give bonus dollars to individuals having Amazon Dollars in their account. This gain could be tax free. If enough money were deposited in Amazon, they may not need a credit line to run their operations. This could create a new form of currency and wipe out bitcoin.
I had noticed that for every 600 shares you were short in early 2012, you would now be short only one share. Are these hard to short with the brokers. I have only been playing this using puts but am thinking of going short the shares.
This was discussed by Jake Bernstein at Trader's Expo in Vegas this past weekend. He had suggested buying into any market weakness on Monday or Tuesday. I was going to buy the QQQ on Monday but did not do so. In hind sight, this might have been a good trade to hold through Wed. I wonder if the expectation of big retail sales for Black Friday is creating this market effect.
If you want to hold your shares for the long term to collect dividends, then you should not write calls against them. Think about doing calls spreads. For example, with INTC at 23.54, you could do the Feb 22/24 call spread for a debit of 1.24 This would give you an effective share price of 23.24 which is 0.30 below the current share price.
I found this other video by McMillan. Just insert "Using and trading VIX volatility derivatives futures options" in the search window of Youtube. He spends the first part talking about VIX and trading the VIX options. Then he discusses trading long and inverse VIX ETFs and ETNs. It is around an hour long and is definitely worth watching if you are trading the VIX derivatives.
One of the comments he makes, which everyone is probably already aware of, is the difference between an ETF and an ETN. The only caution about owning an ETN would be if the issuer (such as a bank) were to go bankrupt. Any holder of the ETN would be a creditor in bankruptcy and would get back just cents on the dollar.