Short vol and short SPX is an interesting way to hedge. Not a bad idea at all, if you’re willing to monitor it and rebalance as needed.

What a wild day… I’m just chilling with cash, waiting for a modicum of stability in the markets.

We’ve seen some wild daily price swings lately. Indeed, this is not the stability I’m looking for. I’m all in cash, waiting for calmer seas…

The VIX is up today while UVXY and VXX are down. Just goes to show how going long UVXY/VXX can be a wrong bet even when markets go down.

I agree with GermanTrader’s thoughts. SVXY holders will probably want to reassess their long-term objectives and decide if they wish to stay the course.

Great post and great summary, Scott.

The disconnect between VXX and UVXY today was quite odd. I know they’re different products from different companies and all, but still…

I agree with Seth. Waiting a few days would be worth it, in my opionion

ES futures are bright green, but that doesn’t necessarily mean that UVXY would literally go to zero this week. UVXY does gradually trend toward zero, but they periodically revive it through reverse splits.

It’s interesting, how we were just discussing “event acceleration” not long ago, and here we are, actually facing it. I never imagined that it would happen so early into 2018. History in the making…

Whichever strategy had the least amount of capital at risk is likely the one that proved to be the least pain-inducing today.

Well played, Scott. I wish that everybody else could have profited from this event, but unfortunately there are some folks in “difficult” situations right about now…

I don’t blame you for staying out of the vol product game for now… That’s how I’m handling this situation

More information should be available if/when the dust settles tomorrow… The folks at ProShares and VelocityShares must be inundated with “concerned” investors right about now…. Hopefully we should get some clarity in the morning.

Scott, that’s probably the best possible response. People mostly just want reassurance that things will be okay. I’ve received a number of e-mails like that this week, especially from pot stock and cryptocurrency investors…

The long 50/30 delta put spread strategy looks interesting. The 615% 5-year return is quite impressive, though also keep in mind that the average percent return per losing trade was -72.4%, which many traders won’t be able to stomach. Also keep in mind that we’ve been in a massive bull market for the past 8 years, which could skew any…[Read more]

Thank you Steve, I hope that this has provided some ideas for everyone involved.

As Seth has been saying, having plenty of available cash (or at least assets that can quickly and easily be converted into cash with minimal loss) is essential, along with giving the trade plenty of time to work itself out in your favor.

Kevin, it is true that the…[Read more]

These are all excellent points! I’ve had to discipline myself to give my trades more duration so that the trade has a chance to work itself out if it goes against me at first. I have to think in terms of weeks and months, not days! I haven’t considered going out a full year when buying puts on VXX or UVXY. Perhaps I should look into it, though…[Read more]

That’s an interesting approach, trying different expiration dates. I’ll be curious to see how that plays out