Shorting UVXY, TVIX, surviving, and profiting

Discussion in 'ETFs' started by Saltynuts, Feb 7, 2018.

  1. Correct. Pick your expiry dates appropriately. Longer dated puts = lower theta. More capital at risk, though. What works for you?

    In my view, the shock risk of these instruments more than justifies the theta drag. Just be disciplined. Roll up and out (or down and out) and park profits. Get out when contango starts to evaporate.
     
    #41     Feb 8, 2018
  2. Saltynuts

    Saltynuts


    Fair enough GloriaBrown. But let's say you didn't just keep any excess in cash. Let's say you kept a small ~10% interest in UVXY shorts. Maybe only 5%. The rest you keep, at least initially, in something simple, let's say SPY. Or maybe you go long (or short - might produce better long term resultsome of these 3x regular (lol) equity ETFs. 10% shorting UVXY, 20% in a 3x long fund (or shorting a 3x short fund, which I believe provides slightly better returns over time).

    So, you lever out of your, call it, SPY, and lever into your UVXY short position, very slowly, over time.

    Make any sense?




    The problem is jimmyjazz that people are not stupid, so sellers charge you and extra, super duper premium for that put (I too tried this in the past). Takes a huge piece of the upside potential. Thus, my thinking was you buy the VIX call options, and since VIX does not decay as fast, those options will not be priced as high. Does that make any sense?
     
    Last edited: Feb 8, 2018
    #42     Feb 8, 2018
  3. Well, I've made pretty consistent money doing it, so I think it's a question of trade management as much as anything else.
     
    #43     Feb 9, 2018