Shorting UVXY

[TheBigShort]

I will assume you meant *long call. You will probably allocate capital more efficiently by just purchasing an ITM put.

That being said, I think you can find a signal with these products. Ie. does it always make sense to be short UVXY while the futures curve is in steep backwardation? Maybe it makes sense to be short UVXY when VIX futures have a high roll yield and are in contango? These are things you might want to think of to improve how/where you deploy your capital

 

[dcwriter2]

Yes long call.

 

[dcwriter2]

Yes, lots of allocation and risk issues involved, many not mentioned in this thread. But aside from all that, I was wondering about those short positions that reverse and reverse and reverse split, and if never closing the position is a nice delay of capital gains.

 

[lindq]

This is a popular and with a couple caveats successful long term trade for many....

I don't believe it is either...popular or successful long term.

Having been around here for a while, I sometimes feel a responsibility to point out to new traders when I see a strategy mentioned that can be very threatening to their financial health.

Shorting UVXY is one of them.

 

[dcwriter2]

Done it since 2015, hedged out the sharp rises, took some losses but shorted more when it was over 40 to 60, with hedges. Been trading since 81, by the way. I always close around the time of a reverse split and I’m wondering if tactically that’s a good thing or not. Getting called away by the broker or not getting fills are a bigger hassle than drive spikes. Sometimes I get forced into long Leaps puts instead because of this

 

[KCalhoun]

I bought UVXY today for a swingtrade bc it broke out to 2d high before retracing. Sl 15 exit target 22

I could be wrong, I often am, but personally I think we're overdue for a market drop, so I'm rebuying inverses and would not be short here.... not a trading recommendation

 

[ajensen]

I think shorting UVXY has positive expectancy, but it is highly correlated to being long SPY, which also has positive expectancy. I think being long stocks is a safer (losses capped at 100%) strategy than unconditional short UVXY, with a higher Sharpe ratio.

 

[DallasCowboysFan]

I thought that UVXY was a good play

I recently bought some as insurance against a market drop related to the election

It is 16-17 now
Last March it was 150?
I can handle returns like that
Jesse L would be smiling

 

[bh_prop]

Make sure you hedge otherwise this could happen: https://www.marketwatch.com/story/x...rs-of-work-and-other-peoples-money-2018-02-06 XIV was the same type of instrument as UVXY.

XIV was a short vol etf. UVXY is a long vol etf that won't go to zero during an event. It will however trend down over time with the occasional large spikes that are fantastic selling opportunities

 

[narafa]

Here is a small gift to everyone here interested in playing the vol short medium curve (Through any instrument).

The file attached calculates the constant 30-Days Synthetic Futures (Between F1 and F2 of VIX futures) as well as the percentage of contango/backwardation at the moment.

Your inputs are the orange cells for Spot VIX, F1 VIX Futures & F2 VIX Futures and the dates (Spot VIX date is always today).

This basically shows you how much headwind/tailwind is there in the first 2 months of VIX futures compared to Spot VIX and consequently you know how much headwind/tailwind is there for the instrument/security you are playing.