Registered: Mar 2002
03-09-12 02:30 PM
Quote from PHOENIX TRADING:
What are you talking about?
1) There already is a 2x long short term vix (tvix): so a 2x short is
not a stretch.
2) you call trading 10 million shares /day a miserable failure?
Do you mean it's a bad investment?
Sure if you pick investments by their cute sounding names from a magazine and don't know what you are investing in, you can get burned.
They are momentum plays and hedging instruments in general.
More specifically your comments make me think you don't really
understand XIV and the decay of tvix.
There are about 40 VIX products out there and I'm aware of most of them and their decay function. But what you don't seem to understand is the decay function has to do with their structure, not whether it's long or short vol. The XIV is down 35% over the last 12 months. The VIX is flat!!!!!! And XIV is a one X instrument. This means you could get long XIV with the VIX at 20 and the VIX could go to 15 and you could actually be down 25% to 50% in XIV. How the hell are you profiting from that?
The way to make money on these things (your so called easy money) is to short the f*ck out of every one of these things because they are all going to zero. Problem is there are no shares available to short.
I've been trading option volatility for 15 years fwiw.