VXX and Warren Buffet

Discussion in 'Trading' started by tradingjournals, Aug 23, 2011.

  1. "Hi Warren. How are you doing young man? It surely must not feel that bad at 80. Anyhow, let's get to business uncle warren.

    Warren: do you remember the short put trade you made three years ago or so? Why you do not do it again, but this time on VXX/vix/etc. I can explain more why you would cash in big. PM me at tradingjournals if you want to know me. See you later Warren.--TJ".

    Guys, the key in Warren's trade about the short puts was that it was NOT marked to market. That was the free option he got from the idiots who bought from him.

    He could do a similar trade shorting VXX above 40. As long as there is no mark to market, warren can make a lot of money. I actually know why he would make it.

    How far do you think VXX would go before visiting say 30.
  2. GordonTheGekko

    GordonTheGekko Guest

    Lucky you you aren't my son
  3. Lucrum


    Reminds me of that TV commercial from years ago.

    ..."and this is your brain on drugs".

  4. No, that's 180-degrees off the mark.

    The "key" to Buffett's OTC short puts was that he's not MARKED ON HIS OWN BALANCE SHEET. The sellers of those puts could get them netted and any time... which they did and made billions.

    Who's the idiot(s)? The guy on some message board (or the CEO of BRKa) or the banks/SP desks who made billions on a synthetic long straddle at 12%-vol?

    He marked the loss (A YEAR LATE) to his sheet!

    It's spelled "Buffett" as in Jimmy Buffett.