Anyone ever try shorting the single stock futures contract of VXX or UVXY to avoid the 100 percent margin on shorting the etf? Do they exist? Liquidity? RFQs?
SSFs on VXX and UVXY?
- Thread starter Kirribilli
- Start date
Pointless. Use the VX futures that VXX and UVXY are based off of.
Wouldn't the cash outlay be lower? 10% of VXX trading at 15 would be $150 margin versus maybe 10 times that for VX?
What's your problem with XIV?
Can I hedge with options? Use in an IRA?
I think that your best bet is CFD on VXX; 10% initial margin requirement with daily posting of collateral.
Sometimes VXX makes more sense, as the price mechanics are quite different over certain time-frames/scenarios/re-balancing...
Everyone wants to short VXX on a belief it "decays." And everyone wants to short it for free, without borrow costs... Welcome to ET!
You want to start trading volatility in your IRA?
This is probably good advice for the OP since it appears they don't really understand VIX and appear to think they're the only person on earth to discover a risk free way to make money off contango in VIX. However, at the expense of being pedantic, the VIX funds do adjust their exposure between at least 2 futures every day to maintain the same duration exposure. You'd have to have a very large VIX futures position to be able to replicate that because of the minimum granularity of each contract, essentially you'd need to hold a minimum of 20-22 contracts in total to reflect each of the trading days of the month and trade out one of the near contracts for one of the far every day. If you just trade the near month, at one point you'll be 30 days out and toward the end of the month only a couple days out, so the thing you're trading varies dramatically over the course of the month. Which matters alot for VIX!
With focus on /VX, there could be better options, than continuous re-balancing of M1/M2 spread...
Overall, I think that it's a common theme with these products: people see the effect (long ETP decreases', inverse increases') - while they don't understand the cause. This understanding is crucial IMO.
Sometimes, I see people using TA on XIV, or even worse - on VXX. Funny stuff.