would you like to see double inverse short term VIX?

[PHOENIX TRADING]

Vote if you would like to see a double inverse short term VIX ETF or ETN.

Essentially short TVIX or UVXY.

I'm highly interested, tell me why you would or would not be:
especially idiosyncrasies and caveats to said instruments.


Primary advantages from my point of view:
1) Available in retirement accounts
2) A re-balancing schedule would decrease trading
3) Re-balancing would essentially offer leverage and
you wouldn't find yourself searching for shares to borrow.
4) Your shorts wouldn't be called away at the worst time.

 

[PHOENIX TRADING]

With the overwhelming response to this thread I suspect
Double XIV isn't gonna happen.

thanks to all who read my poll.

 

[Maverick74]

Quote from PHOENIX TRADING:

With the overwhelming response to this thread I suspect
Double XIV isn't gonna happen.

thanks to all who read my poll.

There is already XIV. Why do you want a 2x? The double and triple X ETF's have failed miserably. They don't work...period! The closest products that work are the one X and we have one available.

 

[PHOENIX TRADING]

Quote from Maverick74:

There is already XIV. Why do you want a 2x? The double and triple X ETF's have failed miserably. They don't work...period! The closest products that work are the one X and we have one available.

What are you talking about?
1) There already is a 2x long short term vix (tvix): so a 2x short is
not a stretch.
2) you call trading 10 million shares /day a miserable failure?

Do you mean it's a bad investment?

Sure if you pick investments by their cute sounding names from a magazine and don't know what you are investing in, you can get burned.

They are momentum plays and hedging instruments in general.
More specifically your comments make me think you don't really
understand XIV and the decay of tvix.

 

[Maverick74]

Quote from PHOENIX TRADING:

What are you talking about?
1) There already is a 2x long short term vix (tvix): so a 2x short is
not a stretch.
2) you call trading 10 million shares /day a miserable failure?

Do you mean it's a bad investment?

Sure if you pick investments by their cute sounding names from a magazine and don't know what you are investing in, you can get burned.

They are momentum plays and hedging instruments in general.
More specifically your comments make me think you don't really
understand XIV and the decay of tvix.

There are about 40 VIX products out there and I'm aware of most of them and their decay function. But what you don't seem to understand is the decay function has to do with their structure, not whether it's long or short vol. The XIV is down 35% over the last 12 months. The VIX is flat!!!!!! And XIV is a one X instrument. This means you could get long XIV with the VIX at 20 and the VIX could go to 15 and you could actually be down 25% to 50% in XIV. How the hell are you profiting from that?

The way to make money on these things (your so called easy money) is to short the f*ck out of every one of these things because they are all going to zero. Problem is there are no shares available to short.

I've been trading option volatility for 15 years fwiw.

 

[PHOENIX TRADING]

Quote from Maverick74:

There are about 40 VIX products out there and I'm aware of most of them and their decay function. But what you don't seem to understand is the decay function has to do with their structure, not whether it's long or short vol. The XIV is down 35% over the last 12 months. The VIX is flat!!!!!! And XIV is a one X instrument. This means you could get long XIV with the VIX at 20 and the VIX could go to 15 and you could actually be down 25% to 50% in XIV. How the hell are you profiting from that?

The way to make money on these things (your so called easy money) is to short the f*ck out of every one of these things because they are all going to zero. Problem is there are no shares available to short.

I've been trading option volatility for 15 years fwiw.

Good lord I never said it was a buy n forget it instrument.
concerning your advise to short them all
Yes I'd like to short tvix but i can't in an ira, So yes I would go long an etf that shorts tvix.
But since you are the expert I will let you continue to be wrong on this issue.

 

[tenthousandmen]

just trade futures


even more leverage


btw these products are INTRADAY ONLY

 

[PHOENIX TRADING]

Quote from tenthousandmen:

just trade futures


even more leverage


btw these products are INTRADAY ONLY

thanks for the suggestion

but be aware that the issuer is holding some risk in the case of a blowup.

In the etn or etf the most you can lose is 100% which is not true if you are simulating a fund using futures contracts.

 

[Maverick74]

Quote from PHOENIX TRADING:

Good lord I never said it was a buy n forget it instrument.
concerning your advise to short them all
Yes I'd like to short tvix but i can't in an ira, So yes I would go long an etf that shorts tvix.
But since you are the expert I will let you continue to be wrong on this issue.

You still don't understand. There is nothing wrong with TVIX itself. It's in the costs that are embedded to maintain "all" these ETFs. It doesn't matter if it's long vol or short vol. What I am trying to tell you is that a 3x short vol etf is not going to go up when TVIX goes down. They are BOTH going to go down.

 

[Maverick74]

Quote from Maverick74:

You still don't understand. There is nothing wrong with TVIX itself. It's in the costs that are embedded to maintain "all" these ETFs. It doesn't matter if it's long vol or short vol. What I am trying to tell you is that a 3x short vol etf is not going to go up when TVIX goes down. They are BOTH going to go down.

Let me further illuminate. On July 5th, the spot VIX was trading around 17. The spot VIX is currently at 17. So no change right. XIV was trading at it's 52 week high on July 5th at 19. Where is it now? Is it at 19? No, it's 50% lower!!!!!!!! And this is a 1X product, not a 3X. If XIV were a 3X product it would probably be trading at 4, down 75% with the VIX unchanged over the time period.

Why would you want to be long that? Sure, no one is suggesting it's a buy and hold instrument. But even over a short term period you are fighting the roll yield at every corner. Can you trade them intra-day? Sure. That's probably the only time they work effectively. But it's not free money by any shot. It's volatility moves in both directions. Easier money made trading AAPL.