$VIX: $VIX term structure suggests elevated volatility in the coming weeks/months. Welcome to backwardation. This is usually a good time to own $UVXY since the carry is low & actually compensates you for owning volatility. The only issue is that spot $VIX needs to rise and $SPX needs to sell. Then $UVXY will have an asymmetric payout. However, for now, without $SPX declining we're just waiting around at this point with slightly positive carry. If $SPX rallies now with backwardation occurring $UVXY loses big time. The opposite will occur if $SPX declines.
Overall, a big move in either direction is incoming.
No point in trying to predict where this will land. I'm waiting for a breakout for an indication of where/how I will position.
Let price action decide.
#STUDY
Cheers
Overall, a big move in either direction is incoming.
No point in trying to predict where this will land. I'm waiting for a breakout for an indication of where/how I will position.
Let price action decide.
#STUDY
Cheers
Trade active:
$VIX is breaking out to the upside. I need to see a follow-through to increase my $UVXY position.
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