Lost tons of money on friday thanks to that cum-ey fucker. I left for lunch on Friday short the ES ATM call that expires in 250 days and short UVXY and returned with small profit on the former and huge loss on the later. It was -$50k short delta on ES and short $6.5k on UVXY. So now I'm kinda screwed as volatility surges and do do stocks leading up to the election. So here's is my plan to bail out of this situation. I think Clinton wins and when she does stocks will rise modestly and IV will fall a lot. I will turn the ES short into a strangle by selling the ATM put. I will cover UVXY at a loss and instead convert it into an equal amount of the SVXY bull spread. this way the losses are caped should shit hit the fan, and this is only a 1-day trade. I will also buy a far OTM call on the stangle to make the delta positive instead of neutral. The IV crush should make both these profitable.
roll everything lower and do it again . tests show the long-dated strangles are good at absorbing large one-day down moves . But there will be losses
Why close the UVXY short immediately if you expect Clinton to win? Long term it seems to trend downward (decay I suppose?) and if the borrowing costs aren't prohibitive, couldn't you get out at a more appealing price point?
the map on 538 shows trump needs to win 4 toss-up states plus Colorado to win ...the odds are lower than 1/16 , which is a pretty good bet for Clinton . The volatility markets overreacting again. Brexit was just a popular vote and did not involve delegates. I'll probably make the bet more aggressive on Friday after letting the volatility ride up this week. we'll see what happens