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UVXY

VIXY Volatility VIX Breakout or breakdown soonIt appears that volatility is preparing to breakout or breakdown soon. There is good reason for it due to the fear in the marketplace. Have investor fears reached their peak? Or are we just getting started? I think we will have the answer soon. On the price chart, it appears we have an ascending triangle. On the MACD, we have a symmetric triangle. The apex on the MACD lands on April 9. I am fully expecting volatility to break upward. But the market overall is expecting this. What we think does not always happen. I still think odds point towards it, but either way, I expect we will know soon. We can play volatility with ETFs like VIXY or 2x UVXY. When we expect volatility to go down there is SVXY but that fund has too much risk. It had over a 90% decline in February. Shorting SVXY could be an option if we expect volatility to go up, but my broker does not allow that. Does anyone know a broker that allows us to short SVXY? Please share your thoughts and comments here.
CBOE:VIXYLong
by cedarfox
SP 500 "weekly view"SO obviously we are in the supercycle 5th wave. Inside that, we are in the 3rd wave. Inside that 3rd wave we have just completed the smaller degree 4th wave (even thought it felt big) and are about to trek up for that smaller degree 5th and complete the larger 3rd wave. The drop for the larger 4th should be huge and impulsive just like this last drop. I was expecting an impulsive drop because of the wave 2 corrections being long and slow. So the same goes for this next drop. Timing it is not something I wish to really do right now, except that if the larger cycles are still about correct, then it could start with a September rate hike and end towards the end of the year. GL
SP:SPXLong
by SalN
1
TRADE IDEA: UVXY -- TIME TO LOOK AT LEAPS?It's not often that I play leaps or think of myself as "playing leaps." In case you're wondering, a "leaps" is a "long term equity anticipation security" -- basically, a long-dated option. My most frequent use of them is in my individual retirement account where I'm working a covered call, want to hold onto the underlying for dividend generation, but also want to use the short call leaps as a capital preservation tool and push it out far out in time to decrease the likelihood of my shares being called away. Here, they serve a different purpose in these particular underlyings (UVXY, VXX) -- namely to take advantage of a short-term pop in volatility (which were infrequent over the past year) without getting caught up in short-term gyrations volatility may experience that may make shorter term setups frustrating because they run out of time for volatility to mean revert and/or experience significant contango erosion or beta slippage (I have a few of those on that are, at best, "troubled" here). Traditionally, I have seen two approaches to these long-dated setups intended to take advantage of occasional short-term pops: (1) setups that calculate the approximate erosion/beta slippage the underlying will experience on average over the life of the setup and then sells a credit spread or buys a debit spread at or near the strike at which the price of the underlying is likely to settle toward the end of the option's life; and (2) at-the-money setups. Since a lot of different things can happen during the life of an option such that the average contango erosion or beta slippage is monkeyed with -- making an approximation of where price will potentially settle a less than accurate endeavor, I'm going with the latter type of setup here -- buying an at the money debit spread, with the spread straddling current price (i.e., the long above, the short below). A few tips ... . (1) Since the UVXY leaps aren't the most liquid things in the world, a fill will require a touch of price discovery, so I will start with trying to get a fill for 50% of the width of the spread (hey, we can all dream, can't we) and then adjust the fill price to see if I can get a fill for no less than one-third the width of the spread. (2) This isn't a setup for the impatient. It's a set and forget. With that in mind, keep the spread width and/or number of contracts small such that the buying power effect relative to your account size is within your risk parameters and leaves you with plenty of dry powder to take advantage of further pops in volatility (they may have been infrequent over the past year, but they happen). (3) Give some thought as to how wide you want to go with the spread. Going extremely narrow may, in essence, prevent you from "squeezing in" additional spreads in the particular leaps expiry you're using. If I put on the example shown here, I won't be able to buy 14/15 debit spreads going forward, since selling 14 short legs will close out the 14 longs of the 13/14's, so going wider with the spread and using fewer contracts may give you greater flexibility to use this expiry for further setups going forward. That being said, I can always sell 13/14 short call verticals in the futures without "stepping on" the 13/14 long put verticals, if I choose to go narrow with the debit spread. (4) Early on, the ride could be "rough." High volatility environments tend to have a short life, but that doesn't mean that higher volatility can't last longer than it's comfortable for you as a trader or that any given period of time doesn't have the potential to do things that aren't "average" in nature of what we've experienced since February of 2016 (winner, winner, chicken dinner for short volatility ... ).
CBOE:UVXYShort
by NaughtyPines
10
Skewed Strangle on UVXYAfter a brief moment of Backwardation this week in the term structure of the Vix futures, we came back into Contango. To me it looks like there is still some fear and buying protection is not getting cheaper, especially with earnings coming up on some of the big dogs. I believe volatility will start to come off during the next couple of days, so I want to add to my core short volatility trades. UVXY Implied volatility is still very high so I decided to sell some premium. I sold the 12/8 Strangle for $2.60. What can go wrong? If UVXY rises over 35% in the next 42 days I will get assigned 100 Shorts per contract. I don't mind being short volatility since that would just be an addition to my already core shorts (Part of the plan). Getting long is another ballgame, and one I don't like that much (So I skewed the Strangle to the downside). But for this to happen First UVXY would have to drop over 48% in the next 42 days. If that happens I will be pretty happy making a killing in the rest of my Shorts. On this one, I would take the assignment at the $8 price with a cost basis of effectively $5.40. That is a pretty low price (Most likely would have reverse split by then) and I am sure I can Sell some Calls after to get out of the trade on top. The trade: Short 12 CAll Short 8 PUT Credit received $2.60 Probability of profit is 63%
CBOE:UVXY
by AlexanderGotay
sp500 a little moreI think I can see it.. Yes this has been very tricky. When I see it bust through then I wait to see what the market wants to show me and adjust. As you can see,....IT APPEARS...LOL....like we are if the final wave 5. Today was a small wave 4 and we should move up in the next day or two. Since the larger wave 1 was the longest, wave 5 cant be longer than wave 3. So there is the FIB measurement for wave 3 and as you can see, there is a nice 2900 number just below the 100% wave 3 measurement. Can this be it finally? I think so. This correction (once it get started) should be a good one. But I really think the first part down could be only 5% for the A wave. Then of course the annoying B wave. And that should take us into March or possibly all the way to April before the much bigger 10 - 15% wave C. Ill try me best to time it based on the B wave back up.
SP:SPX
by SalN
1
Volatility to return in 2018!SuperTrend buy signal triggered. We have crossed the rubicon and are now at market levels where retail investors and permabear "professionals" who have been sitting on the sidelines during this most hated bull market in history are compelled to throw in the towel. As they finally re-enter the market, it will lead to increased volatility and I expect up to a 10% correction in the major US indexes in the first half of 2018. Additionally the short volatility trade is extremely lopsided and will not take much of an uptick to unravel. While I do expect volatility to increase significantly from major lows this year, it doesn't mean the major US stock indexes will be negative at year end. To the contrary, I expect more all time highs as the year progresses alongside an uptick volatility which will be a scenario most have not seen often.
CBOE:UVXYLong
by mcostigane