Not an options question per se, but this is probably the best place to ask. How much of a daily drop in SPY would take XIV down to 0? I know it has a beta of 3 vs SPY so in theory, it would take a 33% daily drop in SPY (that seems unlikely, I'd like to think a 20% drop is the worst that can happen). At the same time, XIV also has a beta of -0.5 vs ^VIX which means a 4x spike in ^VIX (say, 15 to 60) would wipe out XIV. Such a ^VIX spike doesn't seem that far out. I imagine a 10% drop in the market that comes out-of-the-blue, can easily create this kind of fear. Is there a better way to analyze this? I just want to know how much money I am willing to keep in XIV.