VIX ETN shorts/longs?

Discussion in 'ETFs' started by GordonTheGekko, Aug 17, 2011.

  1. GordonTheGekko

    GordonTheGekko Guest

    I'm long XIV, since it usually follows the S&P well. Some friends have said this is both a good and bad idea. Any thoughts? Yield?
  2. As long there is a backwardation in Vix futures, XIV looses daily money by rolling over.(VXX daily makes money)
    Thus situation normally happens once in a blue moon but if it lasts for 1-2 weeks with daily 30-40% increase in VIX, XIV can become Zero!

    From 16+ (27th July), it has fallen below 8 till now.
    I lost money in XIV last week but I cut loss immediately.
    Intraday it is still tempting (if you get the turn right) 5 to 10% gain .
    ($800-1000) on 1000 share ($8-9000 investment)

    Even making money in VXX puts is difficult due to the high option pricing.

    Only spreads on VIX Futures option is tradeable.( read Atticus trades)
  3. john33


    I was looking at XIV also. I found an alternative that will work better in certain conditions. IVO, another inverse VXX, with the position taken a different way. I think they close the position if it hits $10 though, not sure the chances of that happening, but it's not too far from it at this point.
  4. GordonTheGekko

    GordonTheGekko Guest

    Switched from XIV to TVIX today. Ouch. Hope to get some money back.