Barclays stops doing VXX?

comagnum said:
'If investors really want to place bets on equity market volatility or use them as hedges, the VIX-related ETF and ETN products are acceptable but highly-flawed instruments. They certainly have a strong convenience aspect to them, as they trade like any other stock. That said, investors looking to really play the volatility game should consider actual VIX options and futures, as well as more advanced options strategies like straddles and strangles on the S&P 500.'

http://www.investopedia.com/stock-analysis/2012/4-ways-to-trade-the-vix-vxx-vxz-tvix-xxv0504.aspx
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Vix etfs do exactly as their prospectus says... Nothing flawed about them.. maybe your and others flawed understanding
 
Scataphagos said:
No worries. I never ran "leveraged" anything for other people. My 15-minutes of fame came from running a mutual fund timing service... and that was before the days of leveraged index funds... all trades based upon "price TA"... same as now for me and my family money.




"Leveraged ETFs" are easy to understand. The fund managers have to pay some premium for leveraged exposure.. and those "cost premiums" in whatever form are an expense, which detract from the "target" performance ... that's all.

You can run up a comparo chart of some index vs. 2x of the same index since 2009. The leveraged fund performance will be greater than the index, but due to the "costs" of acquiring leverage, somewhat less than "2X".
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We'll put
 
Leveraged / inverse ETFs effectively have to rebalance daily in a short gamma way (they buy high sell low) - it's a fine short term bet but you are losing a little every day, and it IS a rip-off vs. futures.
 
frostengine said:
My concern is VXX is all I trade lately, have built a very robust and profitable system utilizing it. However, in the back of my mind, I have a constant worry that the gravy train will end in 6 months.. a year... or some time in the not too distant future due to VXX disappearing..

Thoughts?
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Is it robust to contango disappearing?
 
alex314159 said:
Leveraged / inverse ETFs effectively have to rebalance daily in a short gamma way (they buy high sell low) - it's a fine short term bet but you are losing a little every day, and it IS a rip-off vs. futures.
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Buy high sell low makes $ in trending markets, loses $ in reversing markets. A coin toss. There's no "rip-off" or "decay." It's amazing how few people understand this.
 
haroldg said:
Buy high sell low makes $ in trending markets, loses $ in reversing markets. A coin toss. There's no "rip-off" or "decay." It's amazing how few people understand this.
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I suggest you google and read:
The Dynamics of Leveraged and Inverse
Exchange-Traded Funds
Minder Cheng and Ananth Madhavan
Barclays Global Investors
April 8, 2009
 
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