VIX Volatility Adventures: UVXY revisited

[KCalhoun]

With the VIX under 20, I'm going to try yet again to bottomfish a UVXY reversal. I often get stopped out, but I'll try yet again, because the upside is good.

thesis:
+ volatility always cycles up and down, so buy low, sell high makes sense
+ at $4.85/share, I think risk:reward is favorable here for UVXY
+ I bought small size here, will scale up once VIX > 20

 

[.sigma]

Good luck. Vol products are tricky tricky, yet oh so liquid.

so you’re buying shares at $4.85? No optionality?

 

[zghorner]

UVXY has F'd more people in the A than Elton John.
The never-ending downtrend is obnoxious as hell...yes im holding calls lol.

 

[KCalhoun]

true, it feels like a doomed ship.... but i cant forget buying tvix 52 selling 940... best $/share win in my life. i miss tvix like an ex girlfriend; i trade too much lol

if it were a stock chart i'd skip it, but its volatility and therefore will go up someday... vix wont stay sub 20 forever

also likely they'll reverse split it again soon

 

[Tradex]

volatility always cycles up and down, so buy low, sell high makes sense

Indeed.

 

[Axon]

It's gonna be glorious when UVIX and SVIX finally start trading. Like the good old days of XIV and TVIX but with much less chance of catastrophic failure due to changes in how the rebalancing works.

Details:
https://www.sec.gov/rules/sro/cboebzx/2021/34-91264.pdf
and
https://www.sec.gov/rules/sro/cboebzx/2021/34-91265.pdf

 

[BeautifulStranger]

With the VIX under 20, I'm going to try yet again to bottomfish a UVXY reversal. I often get stopped out, but I'll try yet again, because the upside is good.

thesis:
+ volatility always cycles up and down, so buy low, sell high makes sense
+ at $4.85/share, I think risk:reward is favorable here for UVXY
+ I bought small size here, will scale up once VIX > 20

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While I had a short term reversion signal on VXX on Thursday, don’t periods of low volatility in equity indexes tend to be long, as in years, sometimes?

 

[KCalhoun]

While I had a short term reversion signal on VXX on Thursday, don’t periods of low volatility in equity indexes tend to be long, as in years, sometimes?

Yeah good point about that, if you look at the 3-year chart for vix you can see it was under 20 for an extended amount of time.

 

[KCalhoun]

Lessons learned trading UVXY:

• Best for daytrading during selloff days, not good for swings longer than 3 days
• Don't buy premkt gaps up, don't sell premkt gaps down
• Buy the dip, sell the rip. Always scale in, and use trailing stops
• Like VXX TVIX it is often a sleeper, grinding slowly down, then bam a big spike up.... I set buy-stop orders to automate entries
• Often has a run eod 3:30-4
• When it runs up early by 11, tighten trailing stops, bc it usually drops later

 

[comagnum]

Looking at shorting via UVXY provided there is some validation the SPY appears to be turning. Red flags: herd is all in & leveraged to the teeth.

The easier short appears to be on the RTY/IWM since it's below resistance & well below it's highs. The R:R on the UVXY has gotten my full attention.