Shorting UVXY

Discussion in 'ETFs' started by dcwriter2, Oct 12, 2020.

  1. This is a popular and with a couple caveats successful long term trade for many, as inevitably it reverse splits every year or two, even now that it’s at 1.5 volatility instead of 2. All that staid, I wonder if it’s a good idea never to close the trade, even after one, or two reverse splits. The idea would be to let it slowly dissolve, and avoiding closing, which is a taxable event. Of course all the other short risks exist, getting called away, for exampl4, could negate this but I was just wonder if instead of closing a short UVXY position just letting it run.
     
  2. guru

    guru

    That’s what Seth Golden is doing. He always has a portion of portfolio sitting in long-term UVXY shorts. Then adds to those as needed.
     
  3. horizon

    horizon

    If UVXY is hard to borrow then the borrowing fee will have to be calculated to see how much net gain is.
     
  4. Ok, I guess what I am wondering is, theoretically, could one say short 100 shares of UVXY and never voluntarily cover and, unless called away, never pay capital gains?
     
  5. Sorry for all those typos in the OP, too.
     
  6. i sold put uvxy 28 today
     
  7. UVXY went up 1300% in March. How much of your capital could you allocate to this strategy without being forced to cover at the highs?
     
    DallasCowboysFan and KCalhoun like this.
  8. JSOP

    JSOP

    Make sure you hedge otherwise this could happen: https://www.marketwatch.com/story/x...rs-of-work-and-other-peoples-money-2018-02-06 XIV was the same type of instrument as UVXY.
     
    beginner66 likes this.
  9. Overnight

    Overnight

  10. 10, maybe 20 percent with a far out of the money short call as a black swan/disaster hedge.
     
    #10     Oct 13, 2020