VIX futures decoupled from underlying around the end of March?

Overnight said:
Averaging down long vol...So you are long vol, yes? That would be good for you.
More...
I don't see how averaging down on long vol will make a good play. the decay and drawdown will erode the capital.
A better trade is, when VIX spikes average down on short vol.
 
Girija said:
I don't see how averaging down on long vol will make a good play. the decay and drawdown will erode the capital.
A better trade is, when VIX spikes average down on short vol.
More...

If you can calculate that you can hold through the historical low of about 9ish? That's a safe play.
 
qlai said:
Oh, it will spike, but by that time, my avg price might be too high to benefit :)
More...
Thats why u shd never buy and hold long on vol for a long time.
This is akin to yoloing on puts when market is rallying...?....
 
Girija said:
Thats why u shd never buy and hold long on vol for a long time.
This is akin to yoloing on puts when market is rallying...?....
More...
I just can’t watch this rally with no pull back and not get long volatility ... if I am wrong, so be it but September is coming and all the rest of it - got to try.
 
qlai said:
I just can’t watch this rally with no pull back and not get long volatility ... if I am wrong, so be it but September is coming and all the rest of it - got to try.
More...

Concurred. Look at the VIX chart for it's whole history. If you can survive the level of 9ish, what is the risk?

Well, the risk would have been something like XIV. And we all know how well that one worked. :-)
 
It will be very very interesting to see how the VolQ works out, because as we all know, Nasdaq is a monster of volatility compared to the SP.
 
Look at what contango and backwardation does to a derivative. You can only trade VIX as a future hence it has a cost of carry. 20,000 invested in uvxy in 2016 would be worth 20 bucks now. When vix is in backwardation shorting vix can be profitable. There is no free chicken dinner.
 
Girija said:
Look at what contango and backwardation does to a derivative. You can only trade VIX as a future hence it has a cost of carry. 20,000 invested in uvxy in 2016 would be worth 20 bucks now. When vix is in backwardation shorting vix can be profitable. There is no free chicken dinner.
More...

I never followed the CBOE future structure on my charts. Extra fees and whatnot. I tried it for a while back at beginning of year, but could not extract value from it. We'll see on the CME attempt at a vol future. Could be good, could be bad. With the micro options, I imagine those folks will love these new tools in their toolbox.
 
You must log in or register to reply here.
Back
Top