WHAT IS LIKELY TO HAPPEN WITH UVXY & VOLATILITYGiven the size of the move on Brexit, volatility futures markets are likely to hit a period of sustained backwardation. Pictured here is what backwardation has looked like (red channels) and how it is likely to unfold now (orange tick channels). The channels you see are drawn around UVXY/VIX. The fact that UVXY normally loses value over time is due to contango in the VIX futures markets. In times of crisis, the VIX futures go into backwardation (where the price for a short term contract on something is higher than the long term price). When backwardation occurs, UVXY starts gaining value every day relative to the VIX. The chart shows a period last January where UVXY did just that. If Brexit works out as the same sort of crisis, we can expect the current UVXY/VIX ratio to move from .6 today up to .8 in 4 weeks. From there a bottom should be found and the normal contango structure (with UVXY price decay) resumes. How to play it? You can buy the dips on UVXY and calculate targets based on the VIX top you expect * the ratio for the day on the chart. You can also use the same technique to judge which strikes to pick on buying UVXY calls. Same goes for selling puts - find a price likely to expire out of the money and collect premium. VIX derivative premiums will appear obscenely high ... use the ratios and prior VIX spike paths to calculate good strikes and values. The indicator on the bottom simulates the UVXY roll trade - the black line is the average of short term volatility prices and the red is the average of the midterm, offset by 30 days. When the black is over the red then the volatility options that are sold by Proshares that day are sold at a profit (for more than they cost when they were midterm futures). Keep a cool head - volatility comes and goes. Do the math and understand the structure and you can make money in either direction.Longby codypd557
Sell and Go To Tahiti TradeIf was real time posted in the TV room. Self Explanitory.Shortby chartmojo882
UVXY OPTIONS -- NEARING DANGEROUS REVERSE SPLIT TERRITORYBecause UVXY is subject to contango, it periodically has to undergo reverse splits to keep it from going to 0. The last split occurred in May of last year, when UVXY was sub-10 and it is getting close to that area here. In a nutshell, reverse splits wreak havoc with options positions ... . I won't go into the nitty gritty details here, but the Options Clearing Council (OCC) has a specific manner in which it handles options in reverse split situations, the result of which is "non standard contracts" with potential liquidity issues. Because of these concerns, I'm shying away from playing UVXY via options at all until after the split occurs or there is a volatility pop of sufficient depth to save it temporarily from a split. There are, after all, other instruments in which I can go long volatility without the headache of a potential reverse split occurring in the middle of my trade -- SVXY short (which appears to have dodged the split bullet for a while), VXX long (although there are even concerns with reverse splits in that instrument if volatility continues to hang in at low levels), and, of course,VIX options. by NaughtyPines661
$VXX $SPY $QQQ -- $UVXY - Daily ChartAt lower BB on daily and broke below the 2.272 fib extension. Also, see bullish divergences setting up since April. Record volume at extremes indicative of capitulation, then declining volume over the next six sessions and below average. UVXY avg daily vol %> SPY avg daily vol % for over a month. Nothing more dangerous than complacency. Looks like put support at $9-$10 and this is setting up for a BIG move. Lots of gaps open above and call buyers placing bets into end of 2017. I think volatility is coming back in an big way and will make for gigantic swings up and down. I am long VOLA via VXX calls and UVXY common. Longby optionflow1
$UVXY - DailyTwo largest volume days EVER back to back with higher highs & lows.. Extreme selling usually marks bottoms. Watch and see. by optionflow110
$VIX $SPY - $UVXY 4hr TargetsNot an exact science, but using fibs, gaps, option flow, and pivots with my belief in tomorrow's ES levels. We have a small open gap at 14.24, but I'm looking for a move to 13.24 before a move up. Downside and upside targets provided. Obviously the 61.8 would be first, then become more risky above. Watch for volume confirmation. Gap above at 19.67 is possible, but not probable this week. Days to cover are .33, so a massive squeeze could take us there. Good luck.Longby optionflow1
$UVXY - UpdateBounced off S3 on 60 min and filled gap. Took profits on weeklies, but May 20's still open and common. SPY had $19M in put premium, which indicates more room down. by optionflow111
Cup & Handle forming on UVXY from buy signal on 8/2015scaling in both tvix & uvxy bullish cup & handle formingLongby MoneyFlowTrader220
TRADE IDEA: UVXY JUNE 17TH 10/13 SHORT PUT VERTICALSince I have a "virtual gaggle" of VXX trades on, I'm turning my attention to UVXY setups (in spite of its warts) to go long volatility here. Metrics: Probability of Profit: 64% Max Profit: $120/contract Max Loss/Buying Power Effect: $180/contract Notes: The mid price for this setup is $115, but bid/ask is wide in this instrument, so I'd putz with a fill above mid, particularly since price may back into the setup from where it's currently at (17.03). Look to take the money and run at 50% max profit ($60/contract) should you get filled. Longby NaughtyPinesUpdated 2
SOLD UVXY JUNE 17TH 9/12 SHORT PUT VERTICALDecided to layer on another UVXY short put vertical here, which I got filled for $100/contract ... .Longby NaughtyPinesUpdated 1
Future $UVXY value based on $ES_F #ES_F target 1850.75This is not an exact science, because of time decay and let's just assume my ES target is correct. Based on those two assumptions, I think $48.39 will be the target.. Coincidentally, UVXY has a gap at $52.96. I'll be watching that level. by optionflow4
$UVXY - To rocketNeeds to break above 18.84 to trigger VSB D#1 - at resistance now. Longby optionflow1
$UVXY - Single day moveBiggest single day move I could find was August 24th. +61.82% -- I won't be surprised to see a similar soon. Longby optionflow0
$UVXY - DailyI recognize this is a derivative of a derivative. Using TA and look back for commonalities. Approaching S2 which is the past, the probabilities of a bounce are higher. Approaching the 2.272 fib trend extension with RSI oversold but can go lower. We'll see. VIX:VXV ratio at extremes. I like the R/R here for a long. Also seeing large blocks and call buying in VXX 5/27 $20C's - ~50K Longby optionflow0
$UVXY - 4hrDoesn't have to bounce here, but at S2 and looks like accumulation at this 15.50-15.60 area and now a higher low. Longby optionflow1
$UVXY - Daily ChartApproaching S2 on daily and at the lower bb. We've seen massive selling into new lows w/ ~1.5x volume. UVXY has been crush compared to VIX. I included the VIX for comparison (the orange line). I think a reasonable target for UVXY is $37-$38 area in the not to distant future. Vix only down 8% while UVXY down -75.89% since Nov.. Noteworthy: OPEN GAP AT $52.96Longby optionflow1
Long UVXYWith the oil market moving so much today. I would think this would be a good opportunity for some short gains. I expect a correction tomorrow.Longby KyleHarrison1