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Old Jun 22nd, 2013, 08:49 AM   #73
bologeorge
 
 
Join Date: Oct 2012
Posts: 36
To trade svxy, using bull OTM puts spread is much better than selling naked puts. Svxy has a good possibility to drop to 0. I'm not kidding. This is not a just a theoretical thing.
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Old Jun 22nd, 2013, 02:31 PM   #74
rocky_raccoon
 
 
Join Date: Mar 2012
Posts: 153
Quote:
Quote from bologeorge:

To trade svxy, using bull OTM puts spread is much better than selling naked puts. Svxy has a good possibility to drop to 0. I'm not kidding. This is not a just a theoretical thing.
Can you come up with a realistic scenario under which SVXY drops to zero?
What VIX futures would look like in that case and what would happen to ZIV, XIV, VXX, and VXZ?
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Old Jun 22nd, 2013, 02:59 PM   #75
cdcaveman
 
 
Join Date: Aug 2011
Location: Florida
Posts: 4,014
Quote:
Quote from rocky_raccoon:

Can you come up with a realistic scenario under which SVXY drops to zero?
What VIX futures would look like in that case and what would happen to ZIV, XIV, VXX, and VXZ?
do you want someone to build a model for you?
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Old Jun 22nd, 2013, 03:27 PM   #76
newwurldmn
 
 
Join Date: Apr 2011
Posts: 3,418
Quote:
Quote from rocky_raccoon:

Can you come up with a realistic scenario under which SVXY drops to zero?
If the institution that underwrites the SVXY goes bankrupt.

I look forward to hearing how you top ticked puts after the SVXY has rallied 10 handles .
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Old Jun 22nd, 2013, 04:50 PM   #77
rocky_raccoon
 
 
Join Date: Mar 2012
Posts: 153
Quote:
Quote from newwurldmn:

If the institution that underwrites the SVXY goes bankrupt.

I look forward to hearing how you top ticked puts after the SVXY has rallied 10 handles .
The institution is call ProShares. If they go under, SVXY won't be the only victim. Besides, it's ETF and its assets should be passed to the shareholders if the underwriter goe out of business.
That is one scenario but it is not unique for SVXY and very unlikely. Most people who say that it may go down to zero think of some sort of a broad market crash circa 1987 and I'd like see their logic.

BTW, if I take a position I will post a screen shot with a time stamp here :-)
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Old Jun 22nd, 2013, 04:54 PM   #78
rocky_raccoon
 
 
Join Date: Mar 2012
Posts: 153
Quote:
Quote from cdcaveman:

do you want someone to build a model for you?
If someone says that an instrument may go down to zero they should explain their thinking, shoudn't they?
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