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Not surprised... I will probably go all cash Thursday... well, except for some UVXY I am still hanging on to. I hoping to make bank on that, but I have a stop in place.Thanks J!
Once again... mkt is dead until Jackson Hole. The last 2 weeks of August are notorious for low range action. We just need to be patient, because the volatility will come back -- it always does. I added a bit to my Rut short today.
I never understood why people want to trade (long) something like UVXY that bleeds so badly. What am I missing? Here's a comparison of UVXY to its underlying, and over just the past 5 days, the underlying is UP 6% but UVXY is DOWN -3%. If it were truly 2x (w/no bleed), then it should be up about +12% in the past 5 days, no? I could see shorting something that bleeds so badly, but not longing. What am I missing?http://finance.yahoo.com/echarts?s=%5EVIX+Interactive#symbol=^vix;range=5d;compare=uvxy;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
And here I thought it was based on the VXX..."ProShares Ultra VIX Short-Term Futures ETF seeks, on a daily basis, to provide investment results (before fees and expenses) that correspond to twice (2x) the performance of the S&P 500® VIX® Short-Term Futures Index.TM"http://finance.yahoo.com/echarts?s=^VXX#symbol=^vxx;range=5d;compare=uvxy;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
UVXY suffers from Contango as well as 2X leverage bleeding. Just compare VIX and UVXY over the last year, it must have lost 75-80 % of its value since inception. Now they are doing a reverse split, more bleeding I guess. The prospectus for Proshares say it will eventually go to zero. You should never buy UVXY no matter what, if you want to trade vix I guess VXX is a better tool, but be aware of VIX contango. I hope it helps.
Yes, it suffers from Contago, as do ALL leveraged ETFs.UVXY is a tool, just like any ETF and can be successfully traded as long as you know the issues and trade it short term.So, I guess you don't trade TZA/TNA either? Just sayin'
Correct me if I'm wrong, but not all leveraged ETF's suffer from contango and backwardation. It's my understanding that only ETF's based on futures are affected, such as volatility futures, natty gas futures, etc. Leveraged ETF's tied to indices (TNA,TZA,SSO,etc) should not experience C&B, just the usual decay and compounding. With UVXY, currently it is suffering from contango and decay... a double whammy. Hopefully it turns around for you. Looking at past data, it certainly has the ability to spike up. Maybe it could start on Friday after Benny/J.H.
I am in at a good price and only down a little. I have a comfortable stop in place just in case, but I suspect a good bounce soon. If not, oh well...
I'd give your position some careful thought if I were you. Currently UVXY is down 3.14% while XIV is up 1.74%. I'd choose XIV if I wanted to an inverse VIX instrument.
Remember there is the VIX index and then there are VIX futures. Also there are important differences between ETN's and ETF's. Make sure you know the distinctions between both. Good luck.
So, how would one trade UVXY on the short side? Is there a strategy that would work better than buy and hold?
As long as contango remains, you know I like to long XIV. I've never attempted to short UVXY. And there is no 2x leveraged version of XIV. Not sure why exactly...I'm not familiar enough with vix futures, but are there volatility futures contracts that one can short or long...similar to ES or YM? If so, what are they called?
Thanks, Guys... that backs up what I had suspected... call it what you like, there is no way in hell that I would ever trade (long) something that bleeds 80% of its value every year. That's not swimming against the current -- that's swimming against a tsunami.Yes, TNA/TZA bleed, but nothing like UVXY does... -80% in the past 12 months....sheeeze!
But then again, no sane person would hold UVXY for 12 months...