The Bid Ask spread of UVXY is much smaller than VIX future so day-trade UVXY instead of VIX future?

G

GloriaBrown

I did some simple math:

Market is opened now and the VIX future bid ask spread is 0.05 (please let me know if 0.05 is not a normal spread value)

5 * $10 = $50 spread
and the vix future is worth around 11.4 * 100 * $10 = $11400

Current price of UVXY is $19.66, spread is $0.01
$19.66*600=$11796
$0.01*600=$6

$50 vs $6

Please let me know if there is anything wrong with my math or there is anything better than UVXY to day trade vix. Thank you.
 
I did not look at your math, but the VX future is the underlying while the UVXY is a very poor replacement for it. Also, the VX future is $1000/point while the ETF is $100/point. If you have a futures account and are comfortable with the size of the VX, that us a better trading instrument, If your account is smaller, or you only trade equities, you are stuck with the ETFs.
 
Robert Morse said:
I did not look at your math, but the VX future is the underlying while the UVXY is a very poor replacement for it. Also, the VX future is $1000/point while the ETF is $100/point. If you have a futures account and are comfortable with the size of the VX, that us a better trading instrument, If your account is smaller, or you only trade equities, you are stuck with the ETFs.
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Well I am talking about day-trade so the buy-ask spread cost means a lot. Your explanation doesn't relate to buy-ask spread.
 
comagnum said:
To answer Gloria

The VX futures tick is 0.05/$50 per contract - that is the CME contract spec.

The key advantage of the VX futures is it's traded 23 hours a day. It's more expensive than an ETF as far as costs to enter/exit. It's not good for short term asymmetrical trading, maybe better for hedging. Lots of slippage and weak liquidity at times.

http://cfe.cboe.com/cfe-products/vx-cboe-volatility-index-vix-futures/contract-specifications
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Right now the OCT VX futures have general b/a quote of 11.35/11.40 with a b/a size of 1,265 x 349 at 6:51PM EST.... not sure what weak liquidity you think there is in VX... Switches have a spread of .01 and decent size b/a at this time of night, imagine during trading hours.
 
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