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Can UVXY/TVIX "malfunction" like XIV and SVXY?
- Thread starter Saltynuts
- Start date
I suggest you re-read Saltynuts' post.
He said XIV is bust. This is a fact. XIV has had an acceleration/termination event. It is bust, finished, gonski!
SVXY, although smashed, has not had a termination event this time. It is not being terminated. It is not bust. Whether you should buy and hold it like a dufus is another question, but it is clearly not bust/terminated.
Get your facts right.
Drop more than 90% in few minutes is a bust. Ask anyone on street.
VIX option didn't get busted, so better choice?
Unable to "connect the dots" on partial question. "better choice than what for what specific strategy?"VIX option didn't get busted, so better choice?
Am assuming you are seeking a "replacement" product...
For example: VXX does not have a liquidation issue that bit XIV and "scared" SVXY. So, depending on what kind of trade you had in mind for XIV or SVXY, ... VXX is inversely related, so you may be able to cobble together a strategy with some of the desirable traits, especially if you can nail down your time frame to allow long options to be used.
-Can UVXY/TVIX "malfunction" like XIV and SVXY?
-Not really because unlike XIV and SVXY, the price of UVXY/TVIX goes up during market meltdown and they can always reverse split if their value drops too low in bull market and since market goes up lot slower than going down so they would have plenty of time adjusting their value. So that reducing of leverage on UVXY causing so much loss to the option holders was totally unwarranted.
-Not really because unlike XIV and SVXY, the price of UVXY/TVIX goes up during market meltdown and they can always reverse split if their value drops too low in bull market and since market goes up lot slower than going down so they would have plenty of time adjusting their value. So that reducing of leverage on UVXY causing so much loss to the option holders was totally unwarranted.
no they cant. the inverse etfs tried to return -r where r is the daily return of the vix short term daily futures. vix futures can't go to zero which u need for the tvix to go to 0 but they can double then ur r is -100 which happened on inverse ones.
also you def dont want to buy vix etfs because they are in backwardation. backwardation is when the calls need to be itm to be the same price as the out the money puts because its going down and the only roll your are going to get is worse from buying more forwards further out off a terrible strike when its back to normal.
also you def dont want to buy vix etfs because they are in backwardation. backwardation is when the calls need to be itm to be the same price as the out the money puts because its going down and the only roll your are going to get is worse from buying more forwards further out off a terrible strike when its back to normal.