Selling puts on SVXY

Okay. You've changed from selling at otm put now to waiting for col to go up.

If you want to by on vol going back down you are better off buying convexity in that direction. When vol is high it can go higher real fast.
 
Quote from newwurldmn:

Okay. You've changed from selling at otm put now to waiting for col to go up.

If you want to by on vol going back down you are better off buying convexity in that direction. When vol is high it can go higher real fast.
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DAMN you auto correct!


Okay. You've changed from selling an otm put now to waiting for vol to go up.

If you want to bet on vol going back down after a spike, you are better off buying convexity in that direction. When vol is high it can go higher real fast.
 
get the return history of the vix short term futures index that svxy promises the inverse return of then run a few scenarios of being short through a real vol spike and how long it takes to recover afterwards

(notice you're receiving the % returns and you're shorting something with a small denominator that can have large moves)
 
Quote from newwurldmn:

DAMN you auto correct!


Okay. You've changed from selling an otm put now to waiting for vol to go up.

If you want to bet on vol going back down after a spike, you are better off buying convexity in that direction. When vol is high it can go higher real fast.
More...

OK, how do I buy convexity in the direction of the volatility decline? Put option on VIX or VXX, or put vertical, or something more complex?

When vol is high it can go higher but won't stay high for any long period of time. Realistically, if VIX hits 80, will it stay at 80 for a month or come down the very next day? I bet it will come down just as fast as it went up.
 
Quote from noregrets:

One has to respect that atticus actually has some skin in the game here with an SVXY position. No offense, but you have been defending the put-selling scheme for hours against the advice of a lot of market experience in this thread but (it appears) have not actually taken a position in it.
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I never said I had a position in SVXY and I don't have one (yet). If Atticus or any one else has a position it would benefit me and the rest of the crowd to know what that position is and how it is expected to work.
 
One thing that you have to keep in mind is that SVXY is the inverse of VXX, which is meant to replicate the performance of the VIX futures, not VIX itself. The difference is significant, as you can see by examining these charts:

VIX
VIX futures
VXX
 
Quote from Josef K:

One thing that you have to keep in mind is that SVXY is the inverse of VXX, which is meant to replicate the performance of the VIX futures, not VIX itself. The difference is significant, as you can see by examining these charts:

VIX
VIX futures
VXX
More...

This is exactly the reason I want to be long SVXY (or similar instrument) preferably after a volatility spike. Selling puts on it is just a way to get the underlying at a lower price. I like ZIV better but it does not have options.
 
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