We have had an long bull market. We are at the end of the cycle.

Now we get the two sided action.

That means, learn to trade the vol products. There are other things than these inverse ETFs.

Even if they outlawed the ETFs altogether, you could still trade VIX options, VIX futures, and the mothership SPX options.

And then there is RVX…

A couple of takeaways for me

What I am learning here from Seth are three things:
a. liquidity
b. duration
c. exposure

And about myself.
I learned last year was that I just could not trade XIV. I do not have the gut strength for it. I found I did not want to live with a sword of Damocles hanging over my head. And that it ws just greed.

I moved…[Read more]

Anyone have any ideas on the status of other Velocity Shares products (namely EXIV)? I have some in my 401k. (and thankful for opportunity today, I’m solvent, still trading and far less allocated, phew)

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

Barclay’s is a SIFI

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

Here’s where XIV being an opaque ETN rather than a relatively more transparent ETF is coming into play to an extent. We don’t know exactly what kind of swaps & derivatives Credit Suisse used in this note. Have a look at what CS common stock has been doing after hours. According to the prospectus, as Seth pointed out, acceleration is triggered “if…[Read more]

Even ZIV, which is not practically subject to a termination event, as it is based on M4 to M7, went down an unprecedented amount in the afterhours, from 73 to 50.

David. drill down into the VXX option chain. You will find the largest open interest by far on the JAN 19 PUT 10 strike, followed by the 15. Open interest on the 10 has continued to build over the past month, although that may just be due to rubbernecking by the likes of me.

Yeah my position is down due to this vol spike, but I have a year for…[Read more]

It’s just wild thinking through the levels of abstraction here: (1) Complex spreads on (2) options based on (3) ETFS ($VXX and $UVXY primarily) based on (4) front two-month rolled futures on (5) the VIX volatility index that tracks an (6) options chain based on (7) the S&P500 index of (8) common stock that denotes (9) ownership in a corporation…[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]

Basically what Seth said: Beta slippage may only be a minor factor in a brief scalp trade, but it is a factor nonetheless and would favor shorting VXX over buying SVXY; and again, a disadvantage of shorting VXX is the “undefined” risk involved (unless you find a way to hedge the trade).

With fundamentals intact, maybe SPX keeps trading the technical channel (I believe it will for a time). But if the 10Y hits 3%? What if 2018 sees more selloffs than we saw in 2017? That sounds possible- not a bear market, but possible. 2019 is what worries me, I remember 2006 and rate hikes…In the meantime, I wanna try selling some of those uvxy…[Read more]

In short TVIX position today at 6.65 and 7. Futures looking up. I would hate to be long drug stocks in the am.