What's the point of creating a product that's designed to fail? How is it different from Madoff scam? Or a hedge fund which blew investors money? Onl a few lucky ones would survive. Only CS is a guaranteed winner. Makes me wonder if they even feel bad. Are they going to miss their brainchild?
You guys are absolutely correct, but the originator (CS) developed it to entice investors/spec into the game of short vol with a nice turn key product, that they collected fees on. Why go to the futures market when we have this great security all wrapped up with a bow (with a thick prospectus that if read, was prob not understood)....what could possibly go wrong ? Not saying CS did anything wrong, buyer beware.
But the Florida man said he was not broke but alive, kicking and trading. Arn't you folks barking up the wrong tree?
It's nowhere near as bad as CHFEUR... if you look at the daily volatility of CHFEUR during the pegged period (ATR around 0.001 per day); and then look at the move that occured when the depeg occured (0.2), the ratio was something like 2000:1. In comparision for VIX the ratio was more like 50:1. Also the rewards for shorting VIX futures from 2009 - last week have been extremely good; much higher than you got from playing CHFEUR during the pegged period. I definitely wouldn't (and didn't) touch CHFEUR mainly because I didn't see the point in being a trade that relied entirely on government intervention, but I'd happily short VIX until the cows come home, given the right level of exposure. GAT
I don't feel happy for any genuine trader who was hit hard by the market fall in the last few days. However, as a long-term player of this game for the long haul, I take some comfort that very very few people can parachute into this arena, make some quick millions and fly out to the tropics while I'm grinding away at this for years and years.
There have been numerous inquiries here about why you can't just buy VIX when it's low and sell on a spike because it never goes to zero. I'm sure the answer is math. Why can't you? Does it reverse split forever? I want to know this.