Based on the way the VIX futures contracts are trading tonight, a new all time low for TVIX tomorrow is more likely. But I do enjoy your enthusiasm.
TVIX owns front 2 month VIX futures contracts and rolls daily. The March contract is at $15.85, the April contract is $17.4. The VIX is at $13.34. TVIX won't have a sustained and significant movement up until the VIX goes over 15 at the least. In the mean time it is losing 0.65 % daily to contango.
I don't get it either. Just like people thumb down Beachbum's gutsy calls. I'm on the opposite side of the trade, but I always like to hear what his thoughts are.
Same here, opposite side. Been short since last May. With some trading I did around the last TVIX spike I have moved my cost basis up from $3.2 to $3.9, and still took $1.1 per share profit out of all of the shares I covered. I feel better with this set up. I'm looking forward to the next volatility spike, to do it all over again. I certainly wouldn't short more here, but am holding a small position of 2.5% of my portfolio in case we have a prolonged time period of VIX under 15 like we had last year. TVIX will lose 10% per month in such a scenario.
I know, but it sure sounded good. What is true is that this issuance will increase losses for TVIX holders in the short term, since the Share price will come closer to the NAV.
I am short TVIX, but not shorting more at these levels, in fact I covered a little TVIX today, and am back down to my core short position. I used to think XIV was a good play, however I have found that it takes too long to recover from a sell off. TVIX very quickly gets back down to a new all time low, however XIV is still about 25% from it's high. Shorting of course is riskier than owning, but I'm comfortable with the small % of my portfolio that I use. In my IRA's I sell out of the money call spreads in UVXY, but only in times of high volatiity, certainly not now, and also with a small% of the portfolio.
I aggree they shouldn't be allowed for anyone with less than 1 million in their brokerage account. But with that being said, untill they go away I will short TVIX all the way down.
I think we will get more of the same that we have had since October. Big spike of volatility on some none event, back to new TVIX lows on resolution of said none event. wash, rinse, repeat. At least that is what I am preparing for by covering a little TVIX today. Earnings are flat, so there really isn't a reason for the market to go up or down other than multiple expansion or contraction. Neither of which is justified and both will result in reversion to the mean. My opinion anyway, for all that is worth.
In 2 weeks when this is sitting sub $2, all of the old ones will be gone (except beachbum) and you will see a whole new group show up. All of them will have think they have stumbled upon a goldmine. It is almost like flushing a toilet every 3 months or so with this thing.
In the next few weeks it can only possibly go about 25% lower. However it can lose around 10% per month if the VIX remains under 15 due to Contango. Holding this short is a scary but rewarding adventure. I used to hold indefinately, but now I take a little off with the VIX under 14 and start shorting more and more with the VIX at 22 then 25, then 28 etc. Also when the VIX is over 20 I also sell out of the money call spreads on UVXY in my IRA's. You can make 10 - 25% a week, depending on how much risk you want to take. I normally go at least 10% out of the money and can make 25%. I won't do it with a low VIX though. Too risky and not much reward. Good luck
Alright, I decided to move my buy to cover order up to $2.1, with 40% of my short position. Then I can reload again later. I'm going to leave some on, just in case we get a repeat of last year with about 5 months of VIX below 15.
Looks like I am going to leave a lot of money on the table by covering so high ($2). Oh well it is only 40% of my short position.