I think a lot of us underestimated the power of market manipulation that got us from May to this point without a crash.
In my estimation, that “propping” will make this next crash even worse and volatility plays even more profitable.
Credit Suisse dropping the TVIX on Thursday (after only 9 days notice) is a huge red flag here for the market as well.
MIAM1
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@ProfitHarvest, Absolutely agree...as my coach Keith says...you try and hold a basketball under the pool...watch what happens when you let it go...
Especially funny if Mnuchin's face were to be staring at said basketball :)
Fintrader1111
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How do you feel about UVXY? I bought 2k shares at 31.50 and sold $33 covered calls exp 7/11 which seemed like a no brainer even if it drops to $28 or $29 would repeat again. Although I think I may buy them back tomorrow and wait for it to spike back up..
MJC77
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@Fintrader1111, UVXY is an excellent financial product - I've had my most profitable trades on it. I bought it for 13.80 before the 19th Feb, S&P500 top and got out at 16.14 for a profit of 10.1k (I don't trade options). My position size of 1% got catapulted out the window and I bet the ranch on it because I could see it was extrememly oversold. Do you know how high UVXY went? Just over 3 weeks later near the bottom of the melt down, it topped out at 135.00! Yer, it would have 9X my money. I learnt from that to keep my trailing SL at a safe distance, using the weekly low. No hesitation in recommending UVXY, it's a lot more liquid than it's counterpart, SVXY.
MIAM1
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@MJC77, I will check this out ...thanks for the vehicle recommendation. Always good to learn about new products :)
scheplick
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@MJC77, I've never had a good trade with UVXY and I've met too many people who actually try to hold it over night 😂
MJC77
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@scheplick, That would depend on what sort of trader you are; if you're worried about holding it overnight you're day trading. I'm more of a swing trader, so I hold it for weeks but I understand your point...leverage compounds daily and I do have an appetite for high risk
Fintrader1111
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@MJC77, Thanks.. I am going to hold thru expiration unless SPY bursts thru last months resistance.. I can't imagine volatility staying under $30 for long
MIAM1
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@Fintrader1111, I wish I knew the ETFs well in vol space.
I stick with options on the VIX as it gives me exposure to the confluence of the fundamentals lining up in a time horizon :)
In my estimation, that “propping” will make this next crash even worse and volatility plays even more profitable.
Credit Suisse dropping the TVIX on Thursday (after only 9 days notice) is a huge red flag here for the market as well.