iPath Series B S&P 500 VIX Short-Term Futures ETNArca
Description
⋅
The pricing of the VIX futures tracking ETN VXX no longer reflects reality.
Barclays has halted new issuance of both the VXX and OIL ETNs.
Existing shares of VXX are being bid up far beyond the movement in the underlying futures market.
As I mentioned in a previous post, (linked below), I believe the VIX is setting up for a breakout to the upside.
I strongly caution against trying to trade VXX right now. For one, trading has been halted repeatedly, which may happen again, and you NEVER want to get stuck in a position that you can't trade out of. For another, VXX pricing is no longer tracking the VIX futures, so it's impossible to predict how VXX will respond to a significant move in the VIX futures.
When the price action in a market is irrational, technical levels become irrelevant, fundamentals become irrelevant, and you can't expect logical price movements from the market. For example: See the recent price action in crude oil futures (CL1!).
One of the most valuable skills in trading is recognizing when not to trade.
VXX right now is like a crate of 100 year old dynamite sweating nitroglycerine in the desert heat. DON'T TOUCH IT!
Have you got any clarity on how this might move when Barclay resume "normal operations"? News says they halted issuance of new units, and will resume when they find the demand or something along those lines. VXX outperforming VIXY strongly
News says they halted issuance of new units, and will resume when they find the demand or something along those lines. VXX outperforming VIXY strongly