Exiting a Short UVXY position

Discussion in 'ETFs' started by dcwriter2, Jan 18, 2021.

  1. Ok, first off I know there are a lot of haters for this trade, but I reallly don’t need to hear from them. I’m short about 20% of my account, most of the rest in cash with some far OTM long calls as a black swan hedge. Some short vol proponents might say that’s all I need to do — hold and ride out any drawdowns. But what if I wanted to time closing my short position? What’s the signal? Hits backwardation? A certain VRP level? How does such a trade perform against the one I’m currently holding?

    Thanks in advance.
  2. maxinger


    Is this Tulip Mania #2 or rather UVXY Mania?
    Is my eyesight failing terribly?
    was the highest price ~ 240 000 000 and now 10?
    ie it dropped from 9 digits to 2 digits?

    Those who traded with the flow should be very pleased.

    I don't see any sign that it is reversing direction to go up.

    This is probably the taste ( good or bad ) of what is going to happen to Bitcoin.
  3. Ok, so you are in the short and hold category. Fair enough. Any others out there, especially if you buy back at certain times?
  4. KCalhoun

    KCalhoun Sponsor

    I buy UVXY off 2day low pivots and scale in at 2day highs in-market. I use prior day's high and low to make decisions.

    Premkt it often reverses its gap direction
  5. Long UVXY? Not my jam.
  6. It is pretty interesting to see UVXY resilience even market performing pretty strong.
    Any implication?
  7. If i understood you correctly your short the market as in long UVXY

    if i also understood your question "But what if I wanted to time closing my short position" correctly of when is best time to close your position. then below is a potential answer

    instead of long far long OTM calls, i would do (and currently have) long verticals, long 15 calls or 20 and short the 25 calls. because the problem i see for myself when long calls regardless how far and lets say they are hit because uvxy has gone up significantly, close to your options whether below it still or at it or above it slightly, and your position profit has grown significantly your most likely NOT going to hold because the position made many multiples what you started, you will either roll it or exit it, thus you place a cap manually thats automatically placed when your long a vertical, long 15 call lets say and short 25,, a vertical at also allows you to have ur strike prices lower and close than a straight out call for the same cost and sort of enforces discpline and patience kind of like a rule where you close it out when the top strike is hit, UVXY for example at 25 or close to it, and allows you to roll it to a higher ones if the move continues (like it did in march 2020) from 10 to 150. THe odds though this is happneing again any time soon i speculate is close to none, i stick with verticals and consider the amount i put into it as lost on day one, simply as a hedge, not sure i would call it black swan hedge since its a vertical and position is capped (in my case) but i can always roll the position, the verticals i do usually have a 5-10 dollar strike range and a 1 to 10 or 20 pay out risk/reward ratio, assuiming its at the top strike, odds of it hitting probably LOW, but once again key is verticals sets a range for you to exit and to roll it if you think move is to contonie so that answers the "time the exit" and allows you to be in at a lower strike for the same cost as a flat out long call
  8. Sorry, no I do not short "the market". I short the UVXY ETF. Pretty much the exact opposite of shorting the market.
  9. so whats the black swan event looking to happen in uvxy?
  10. Your guess is as good as mine. Oct 87? One day VIX jump to 240? Or something with less altitude.
    #10     Jan 20, 2021