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.

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…

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.

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]

Now, the obvious question asked at Mark’s webinar was “When can we start trading SVXY?”

It was pointed out that as long as you have backwardation across the board SVXY faces a headwind. And this kind of backwardation can take a while to resolve. But once contango is restored, SVYX should see some nice upside.

I myself sold a small JUN 10 15 put…[Read more]

So the sticking point in the whole story, where it gets messy, is
with the futures.

The raw material for all these ETPs is VIX futures. There is a
limited supply.

So if you are a futures trader and you know that CS, Blackrock and
Barclays are going to have to buy an unprecedented amount of futures
after the bell at 4 o’clock, what are you…[Read more]

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

Barclay’s is a SIFI

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.

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.

Russell Rhoades did a presentation awhile back that stated you must have a 100% increase in both M1 and M2 on the same day for a termination event to be triggered for XIV. A next to impossible occurrence, he said.

I wonder what he has to say today.

I bought a boatload of UVXY 15 calls on Friday before the close, out of impulse. Plus some shares. “Whites of their eyes.”

They were in and out of the water at the end of the day Friday. I was thinking maybe I would break even or lose a little money on them.

Sold today at 5x and also the shares.

On Friday I also bought back the short legs on my…[Read more]