"Jgills Registered: Aug 2011 Posts: 230 06-02-13 01:52 AM Quote from rocky_raccoon: This is exactly the reason I want to be long SVXY (or similar instrument) preferably after a volatility spike. Selling puts on it is just a way to get the underlying at a lower price. I like ZIV better but it does not have options. Everyone has said their part and u still want to do it, so get it over with and trade it." ___________ you change the trigger price because you realize instinctively that you don't understand the product or how to use it.
If you think that SVXY will hit 60, then, seeing as it's now trading at 73.39, shouldn't you be buying puts on it?
73 puts are at $6.20 or so for July. They are meant to be sold, not bought. All it takes is a mild rebound in the general market and VIX (and all its derivatives) will drop quickly. Buying put vertical on VXX may be a good alternative (July 20/22, for example) to selling SVXY put.
I changed the trigger because market moved faster than I expected. It did not change my opinion of the product. My ideal entry point is 20 - 80% less than 100 top, similar to XIV retrace in Aug-Sep of 2011.
"20 - 80%" proves it. you have received some excellent advice on techniques on this thread, but have decided to ignore it. you come across as not being serious about committing capital to this kind of trading. this is my last post on this thread.
I mentioned in the beginning that 80% decline was possible. I was frustrated that it had not happened at that time but now, who knows, we may see a repetition of 2011 with 80% decline in SVXY. I don't believe it will go to zero though. It would mean VXX going to infinity. As for techniques, there were plenty of warnings that SVXY was heading to zero and one suggestion to sell calls on it. That is the same as recommending selling puts on VXX. However, no one showed concrete numbers or simulations of how exactly should VIX futures behave for SVXY to go to zero. The only person who could've said something interesting was Atticus but he decided not to disclose his position or strategy.
Dude, if you think that SVXY is going to crash, then go ahead and buy some puts. You said you thought it could go to 20. Do you think there's a good chance of this happening before September expiration? Then go ahead and buy the September 45 puts. They're selling for $2.00, which means that if you're right, you'll make a profit of $23.00, or 1,150%. Seriously, do some analyses and go ahead and take action if you have strong beliefs about what's going to happen. Otherwise, you're just wasting your time with wishy-washy pondering.