Discussion in 'ETFs' started by osho67, Jan 14, 2011.

  1. Under what conditions will the price of VXX (ETF) will go up. There has been volatility in the past but it seems VXX continues going downward. Dont understand. Plese comment. Thanks
  2. The ETF is fucked up and will continue to go down until they reverse spit it again...

    The fear is that for some reason it will Spike massively ( beyond any normal correction or major sell), but very unlikely....

    Wait for a large spike in volatility or market drop, take off your long or sink a short in..
  3. Tsing Tao

    Tsing Tao

    this etf is a disaster. get out of it and never play it again.
  4. ^ +1
  5. Thanks for all the replies. Yes I am going to get out. I have earned good primium on covered calls so fortunately losses are small.
  6. it has to do with the roll of the futures, and this whole vix, vxx thing being a derivative of a derivative of a construct....etc..

    it looks like just an ongoing journey to 0, with a few blip up detours

    i think there might be someway to make money on it selling bear call spreads?
  7. as long as spot vix plummets vxx will also; but on a spot move to 20 from here it will spike . due to the fact imo futures have much less premium to spot as they did in the recent past making a spot move up that may possibly move this etn more so. in any case we are on vol lows i would not be shorting vol in size right now.
  8. rew


    VIX futures are usually (but by no means always) in contango. So when the short term VIX futures are rolled forward the VXX has to sell cheap futures and buy expensive futures, thus losing money. VXX will go up the next time we have a good sized crash, like in May/June last year. Then it will trend relentlessly downward.

    Never buy VXX as a long term hold.
  9. VXX has suddenly gone up today by 1.70. Any idea what is the reason? Thanks
  10. rew


    The stock market went down, and as usually happens in that case, the implied volatility of options went up.

    Bring up a chart of the VIX against SPX and you will see that when SPX crashes VIX pops up, when SPX trends up VIX goes down.

    Bring up a one year chart of the VIX against VXX and you will understand the power of the contango to suck away your cash.
    #10     Jan 19, 2011