Mark Spitznagel returned a few thousand percent on such a strategy. There is a lot of info out there on that sort of thing. Essentially, he says that the market undervalues probability of downside at times but he also uses aggressive longs for some of the funds.
How is Long VXX not Free Money?
- Thread starter stockpredictor
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Yes, you didn't say about his spectacular loss when svxy collapsed. And that includes Seth Golden too.
Don't know of it. I was under the impression that his strategy typically slow bleeds over time with occasional spikes, except the funds that long with a small portion on hedges. Got a link?
The harsh reality is, total noobs, will join the 90/90/90 club, with or without your/our protection.
This is the industry the we're playing in.
VXX/UVXY are so low here I expect to double my money on them once VIX spikes > 20. The VIX always spikes intermittently, look at 1year chart.
I successfully daytraded VXX back on flash crash day many years ago. These are tricky to trade. I buy the dip sell the rip. When they selloff I buy early reversals. When they spike way up I sell, like TVIX at 940. Multiple entries and trailing stops are key.
This is a rare exception to my rule of never adding on the way down, within reason. Eg I was long a few hundred shares from slightly higher, I bought 400 more eod today. Because VIX and etns like UVXY VXX are pivoting instruments, it's not if but when. My traders were skeptical when I said TVIX under 80 was cheap... til I sold weeks later at 940. UVXY under 6, VXX under 10 is a bargain imho (not a trading recommendation.... they could still drop much further).
Contango erodes value over time, like premium decay, so short swing trading holds < 3 weeks are best.
I successfully daytraded VXX back on flash crash day many years ago. These are tricky to trade. I buy the dip sell the rip. When they selloff I buy early reversals. When they spike way up I sell, like TVIX at 940. Multiple entries and trailing stops are key.
This is a rare exception to my rule of never adding on the way down, within reason. Eg I was long a few hundred shares from slightly higher, I bought 400 more eod today. Because VIX and etns like UVXY VXX are pivoting instruments, it's not if but when. My traders were skeptical when I said TVIX under 80 was cheap... til I sold weeks later at 940. UVXY under 6, VXX under 10 is a bargain imho (not a trading recommendation.... they could still drop much further).
Contango erodes value over time, like premium decay, so short swing trading holds < 3 weeks are best.
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It's very tempting to buy loads of VXX here, this happens only 2 or 3 times a year where you can get VXX while everyone is oblivious to nothing but historical highs day after day after day after day. Then we get those few weeks of fear where the markets suddenly drop 8% in 12 days and everyone is running for the exits wildly all while the vix quietly skyrockets 73% in 4 days and 3 hours. Its going to happen. Its definitely 999999% going to happen. So slowly adding a position in VXX if you want to hedge your risk free long term stocks that only go up day after day after day might be a good time to do so very soon.......
UVXY can double easily.
Aside from that my retirement portfolio is literally printing free money. Another historical closing high once again today.