Anyone else expecting volatility to continue to come down?
I went long XIV on Tuesday, betting on a budget deal, and euro solution for Greece. I'm hoping for a fast move to somewhere a bit above 20. Originally I had planned to sell if it hits 21, but volatility is getting crushed and appears to have some momentum.
I think 2Q GDP estimate comes out on 7/29, so that throws a bit of a wrench in things....but anyway. Anyone have a guesstimate on where volatility will be in the coming weeks?
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I've been buying chunks of XIV since it was at 15+, and another limit order got filled this morning at 10.50.
I keep thinking about going long volatility, but have decided against it. I have no clue when the volatility will turn around.....but it will. I'll forego the long side and catch it on the correction by continuing to average down.
XIV, Declining Volatility Outlook
I see XIV as disappointing for the next couple weeks until all this deficit posturing blows over.
In the medium term ( 1 - 3 Mos.) I'm still bullish on it. I know too many people who have been killed by VXX the last 18 months.
I'm taking a good hard look at shorting the dollar via UDNT or URR for the next medium term play. It's being driven down by the unseen hand resulting in a kind of stealth treasury default.
In the medium term ( 1 - 3 Mos.) I'm still bullish on it. I know too many people who have been killed by VXX the last 18 months.
I'm taking a good hard look at shorting the dollar via UDNT or URR for the next medium term play. It's being driven down by the unseen hand resulting in a kind of stealth treasury default.
Siberia, first pivot support for your XIV is less than a dollar down for today. Let it ride. The same for the TVIX I hold is over six bucks down there. Yes, you will hurt til they post positive debt news, but then you should profit. I am riding out a thrashing on the trapped longs I hold, same bad deal, so hence the TVIX hedge. You can hedge with a gold issue. This advice is only to reflect on, and can be costly to act on. Good trading to you.
Now is a good time to start a position in XIV, I mean literally, right now.
Expect it to continue to drop drastically and cost average based on that assumption, the nature of the VIX is that it always surges suddenly and than gradually falls back.
the VIX has a range that's almost guaranteed to return to it's mean and today it has surged reasonably above that mean to make a short position worthwhile, it spends most of the time in the low end of that range, from 16 - 18, it's now almost up to 22..
The way to look at this trade using XIV, if you buy it now you actually want to see it drop more and cost average into it.
Buying now is for insurance in the event the House actually pulls a Hail Mary over night and increases the ceiling, you'd have missed the boat.
Expect it to continue to drop drastically and cost average based on that assumption, the nature of the VIX is that it always surges suddenly and than gradually falls back.
the VIX has a range that's almost guaranteed to return to it's mean and today it has surged reasonably above that mean to make a short position worthwhile, it spends most of the time in the low end of that range, from 16 - 18, it's now almost up to 22..
The way to look at this trade using XIV, if you buy it now you actually want to see it drop more and cost average into it.
Buying now is for insurance in the event the House actually pulls a Hail Mary over night and increases the ceiling, you'd have missed the boat.
Everyone is on the same side of that trade.........
If everyone is wrong, it's going to be a strong move when they all say "aha"
If everyone is wrong, it's going to be a strong move when they all say "aha"
Minion, you may be completely right, but as I said above, the VIX always returns to the mean.
You could buy XIV with the VIX right now at 23 and the VIX could spike to 50 for all we know.
The point I make is that no one could make a sound debate that the VIX won't inevitably come back down to a point below where it is now.
That's why I mentioned that seeing it go down more is a good thing, giving you the chance to average in at even better prices.
You could buy XIV with the VIX right now at 23 and the VIX could spike to 50 for all we know.
The point I make is that no one could make a sound debate that the VIX won't inevitably come back down to a point below where it is now.
That's why I mentioned that seeing it go down more is a good thing, giving you the chance to average in at even better prices.
I got more aggressive today on XIV for the obvious reasons, my short positions held me together like troopers, XIV will be there like a nitro shot when the madness dies down.
The thing with the VIX is that it can go down even while the market is going down, catching the VIX high is like catching AAPL on a 10% dip....doesn't happen too often.
The thing with the VIX is that it can go down even while the market is going down, catching the VIX high is like catching AAPL on a 10% dip....doesn't happen too often.
I bought more as well, this morning
Ditto, I'm deriving a demented kind of satisfaction, the more into the red it gets, the more excited I get.
'couse, it doesn't hurt that I already owned VXX as a hedge for XVIX, it's complicated.
'couse, it doesn't hurt that I already owned VXX as a hedge for XVIX, it's complicated.
With the S&P downgrade, strong probability Monday will yield some excellent buying opportunities.
Last week I freed up a lot of cash, to the point that I was worried I might be missing the boat over the weekend.
This is going to suck for my long equity positions, but wherever the market settles, once the VIX dies down it'll be a nice chunk of change to help that medicine go down.
Last week I freed up a lot of cash, to the point that I was worried I might be missing the boat over the weekend.
This is going to suck for my long equity positions, but wherever the market settles, once the VIX dies down it'll be a nice chunk of change to help that medicine go down.
Just increased my position by 30% with the VIX @ 45 using cash from shorts covered, forget Six Flags, this is more fun.
I stupidly held XIV over the weekend, I was up...
The after hours downgrade screwed me, however I was able to day trade TVIX today for some profit. (should of held longer, didnt think it would bust through -4% on indexes >< )
May do it again tomorrow if the sentiment is still bad, I'll follow the market down with tvix until my day trades max is made.
I should of just followed my gut on friday and got tvix instead of xiv, or at least dumped it before the weekend when it was up 5-7%, typical rookie mistake.
The after hours downgrade screwed me, however I was able to day trade TVIX today for some profit. (should of held longer, didnt think it would bust through -4% on indexes >< )
May do it again tomorrow if the sentiment is still bad, I'll follow the market down with tvix until my day trades max is made.
I should of just followed my gut on friday and got tvix instead of xiv, or at least dumped it before the weekend when it was up 5-7%, typical rookie mistake.
I've been buying chunks of XIV since it was at 15+, and another limit order got filled this morning at 10.50.
I keep thinking about going long volatility, but have decided against it. I have no clue when the volatility will turn around.....but it will. I'll forego the long side and catch it on the correction by continuing to average down.
I agree, VIX will come down, so I'm trying to hedge with XIV. It may take XIV a couple weeks or a month or so to recover I think.
I'll just do day trades on VIX so I'm not stuck with it overnight the night it decides to plunge.
TVIX is especially hard to time, it can swing 10% in 30min.
I'll just do day trades on VIX so I'm not stuck with it overnight the night it decides to plunge.
TVIX is especially hard to time, it can swing 10% in 30min.
Just seeing this now. Got in at 10.50 on XIV. May buy a little more if it gets to 9.50.
OBL, no need to time it. Just put a stop or stop limit at or around that 10% mark.
OBL, no need to time it. Just put a stop or stop limit at or around that 10% mark.
I doubled down at $9.60, I've also been covering shorts over the past two days to free up cash.
I'm actually hoping to see even higher levels on the VIX, but if this is as high as it gets I can't complain.
I'm actually hoping to see even higher levels on the VIX, but if this is as high as it gets I can't complain.
VIX isn't moving as wildly today, been watching TVIX for an entry.
May just add more to my XIV position to average down, got in at ~11.
May just add more to my XIV position to average down, got in at ~11.
Cash on hand, waiting for below $8....
Well it was fun, but I'm out of day trades. Another successful day trade on TVIX.
I'll be back Monday.
I got into XIV way too soon :(
I'll be back Monday.
I got into XIV way too soon :(
This is a chart from Yahoo finance showing the VIX over a 20 year period with a cross-hair cursor for reference..
http://finance.yahoo.com/echarts?s=^VIX#chart11:symbol=^vix;range=my;compare=vxx+viix+tvix+vixy+^rut;indicator=volume;charttype=line;crosshair=cross;ohlcvalues=0;logscale=on;source=undefined
If you position the cursor to the right end of the 20 year chart, where we now are, you can count there have been only 6 other times in 20 years when the VIX has reached this level or higher.
I also included VIXY, TVIX, VIIX and more importantly - VXX.
VXX has been on the market for almost three years and it does roughly the same thing the other ETN's do.
Notice the EXTREME descent in value for VXX relative to the VIX.
This is because of volatility (or the volatility of volatility in the case), these ETN's lose value the more often they meander up and fdown, the chart shows it plain as day.
If anyone has made money solely using one of those long instruments this past month, I highly suggest selling.
The nature of the VIX is that it will start to ease, long before a severe market decline reverses - I included a chart of the RUT to put that in perspective, the VIX will always revert to it's mean, while equities will gain in value over time - meaning using these ETN's for anything more than a short term gain is a very bad idea...especially where this level on the VIX has only been seen half a dozen times in two decades.
The loss in decay will also apply for the ETN I mention on this thread, XIV, but at this level I'm gambling it will gain far more than it will lose in short term volatility (of volatility) once the VIX declines.
http://finance.yahoo.com/echarts?s=^VIX#chart11:symbol=^vix;range=my;compare=vxx+viix+tvix+vixy+^rut;indicator=volume;charttype=line;crosshair=cross;ohlcvalues=0;logscale=on;source=undefined
If you position the cursor to the right end of the 20 year chart, where we now are, you can count there have been only 6 other times in 20 years when the VIX has reached this level or higher.
I also included VIXY, TVIX, VIIX and more importantly - VXX.
VXX has been on the market for almost three years and it does roughly the same thing the other ETN's do.
Notice the EXTREME descent in value for VXX relative to the VIX.
This is because of volatility (or the volatility of volatility in the case), these ETN's lose value the more often they meander up and fdown, the chart shows it plain as day.
If anyone has made money solely using one of those long instruments this past month, I highly suggest selling.
The nature of the VIX is that it will start to ease, long before a severe market decline reverses - I included a chart of the RUT to put that in perspective, the VIX will always revert to it's mean, while equities will gain in value over time - meaning using these ETN's for anything more than a short term gain is a very bad idea...especially where this level on the VIX has only been seen half a dozen times in two decades.
The loss in decay will also apply for the ETN I mention on this thread, XIV, but at this level I'm gambling it will gain far more than it will lose in short term volatility (of volatility) once the VIX declines.
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