Bustin, good to know others are playing around with these too. I thought of the out right debit spread approach as well. It just seemed like the initial premium was so high, but maybe I was looking at the wrong strike prices. If you are going 6 months out where it is trading at today, what kind of a price point do you pick? Like maybe $30/$15 put spread, or do you go out of the money? Thanks in advance
Electrowing these never get old. I wanted to share with you some results I had with puts on UVXY. I started playing with UVXY put calendars in April, then I had to start over after their reverse split, since I could no longer sell puts on the old strike price. so June 4th I bought $40 January 2016 Puts on UVXY for $14.83, I then sold weekly $40 puts and rolled them every week against that position. Then I let them all expire worthless on July 10th. There is a ridiculous amount of premium every week and so the total I made was $5.2 by selling the puts The value of the puts I am still holding is now $19.7. Now I plan on spreading those puts by selling $30 Jan 2016 puts against it. I will take the proceeds and start over with put calendars at the $25 strike price. It's neat because you can do this in your IRA too. Anyway I think I found an even better way to play these worthless trading vehicles. GLTA
The title should have read "I saw my first stage 4 of this cycle" I think this is about the 5th one I have been through. The hardest one to watch was the ebola cycle. People lost fortunes in that one. This one was small and quick.
Although he mocked me and called me a liar over and over again, debtdue has given up and passed his shares on to a new stage 1 TVIX "investor". Congratulation on completing all of the stages of TVIX syndrome.
Welcome to stage 4. I try to prevent people from losing on this, but I rarely succeed. Good luck in the future.
Over a million shares available at my broker. 3% interest rate, which is the same rate I have seen since May 2014 when my first short position was established.
Or just stay short and not have to time anything. Maybe add to the shortduring vol spikes to bring the % of portfolio back to something meaningful. 80-90 % annual return with only temporary risk. I don't think it can get any better than that.
I encourage new Stage 1 + 2 longs to look at the time period of April 23rd through June 23rd. Absolutely nothing happened in the stock market. The VIX hovered between 12 and 15, but TVIX went from $11.60 to $7. Then during the Greece thing it almost got back to $11, before crashing down to new all time lows in a matter of a week. Unless your timing is perfect, you will lose big.
I remember the great triple bottom of $2, (now $20), we couldn't convince anyone that technicals don't work then either.
UVXY is another worthless entity that tracks the same index. The nice thing about it, is it has options so you can short it in your IRA. Nothing like retiring off of taking the other side of the "hope" trade. It's like being a casino owner. There is a ton of premium in them though, so you want to be buyers and sellers of the options. Buy an at the money leap put, come back in 6 months, sell an at the money put for the same price that you bought your leap put. You have created a put spread with an almost guaranteed 50% payout. If you want more constant action you can sell call spreads, a little more dangerous in my opinion.
The futures are very steeply in contango. But you can go ahead and keep making up excuses as to why you have bought something that will only lose you money. Good luck with that strategy.
I covered half my short position on February 25th, ended up shorting them again more than 50% lower during the last bump up in volatility. I would have made much more just by holding this short ad infinitum. That will be my strategy going forward, reloading during vol spikes and holding forever.