How does VXX work

D

Derrenoption

Hello,

I wonder about the symbol VXX how this works. When I look at the chart in TOS it has went from 8850 down to current 14.04.

When looking the chart is going down. What I wonder is how low it can go.

1. For example I wonder if they do a Split in VXX if it comes down to much and they keep doing that all the time?
2. If that is true, I wonder how many times they have done a Split like that?
3. Would it be correct to assume that VXX will keep going down like it has in the same manner as it has done since 2010, would that be the normal nature of VXX?

Thanks
 
I believe the VXX has done 4 reverse splits since 2010.
They have occurred when VXX was in the low teens or just under $10.
One would expect that the next reverse split occurs when VXX reaches $10 again, but who knows.
 
Yes, I have searched on VXX for a while and understand a bit how it works but I think I wonder if VXX really can go to Zero?

>> One would expect that the next reverse split occurs when VXX reaches $10 again, but who knows.

Could it really be so that VXX goes to lets say 0.1$?
What I mean, then it would be very difficult to trade this symbol? I wonder if it wouldn't be a natural interest to always Split this product in 4 to 1 for example so the price is attractive to trade?
 
Derrenoption said:
Could it really be so that VXX goes to lets say 0.1$?
More...

Probably not. VXX is a popular vehicle. Some institutions are prohibited from trading an issue when it drops below a certain price... like $5 or $10. If a popular issue drops below whatever critical level, there will be a reverse split so as not to exclude players.

VXX trades on high volume, so it's "easy" to stick your neck out on it if you have a mind to.
 
Derrenoption said:
Hello,
I wonder about the symbol VXX how this works.
More...

Easy. You buy it, and you lose money. You don't touch it again for a couple of months, then see it spike up one day, and buy it again. Once again you lose money. You repeat this cycle 3 or 4 times and then swear it off for good. A believe alcoholics call this a "moment of clarity."
 
>> Probably not. VXX is a popular vehicle. Some institutions are prohibited from trading an issue when it drops below a certain price... like $5 or $10. If a popular issue drops below whatever critical level, there will be a reverse split so as not to exclude players.

That sounds logical, that was a good answer. As it is popular and if the price drops to much, it would be in greatest interest to do a Split to get the price to a higher level again.
 
You must log in or register to reply here.
Back
Top