Yeah, I looked at XIV way back on this thread, did a trade on it years ago but decided against it in favor of VXX. XIV was (past tense now!) like a derivative of a derivative of a derivative (too weird), and volatility drag sucks.
But I don’t understand where the money went (complicated question). If it were functioning “normally” a 100% increase in futures might translate into perhaps a 50% drop in XIV (maybe I’m wrong). Did they have internal trading mistakes? Did they design it from the beginning to take everyone’s money? Are they making a gain on this liquidation? Was there insider trading?
Agree with the talk from Blackrock and others that these products should be marked “unsafe”, some sort consumer projection agency. This is the same 2008 thing; Wall Street are intentionally designing shit like CDOs that nobody will ever understand, then they cause market collapses, and then they say “see in the fine print” you should have known.
Also, it’s distasteful that Credit Suisse are bragging “don’t worry (investors in our equity), we didn’t take any losses, just those dumb ETP investors we screwed!”.
It’s always fun to laugh, in hindsight, check out the last few posts from last year (hehehe)…
“I think it is extremely unlikely…the M1 M2 blend makes the intraday 80% move highly unlikely. Think about the types of events that would cause an intraday move like that. Presidential assassination, nuclear war, catastrophic west coast earthquake, 9/11 scale terrorist event. In all of these situations I see markets being halted.”
why trade these tracker etfs PA? They are known for extremely high tracking error and you could just as well accomplish your goal purchasing the actual options.
My guess VIX will return to <20 levels by Friday and <15 the following week.
I would short futures (and do sometimes), but they trade is slightly too large of units for me. Maybe in 5yrs I’ll be BSD enough for that, you have to roll them, but better than a derivative of a derivative (VXX). Looked at options, but seemed like it was making things more complicated than needed.
it’s funny how these guys thought stock market circuit breakers meant that the VIX couldn’t spike enough to terminate the ETF. volatility and the equity markets are only mildly correlated. and if you suppress volatility and equity prices rise over time, the risk of a major decoupling is obvious. idiots.
It makes sense. If you short 4 contracts on the way up to 40, you’re in for $100K, but then if VIX doubles to 80, you’re in for $200K, brokers increase margin requirements when shit hits the fan, suddenly that short is a lot of your account even if you are semi-BSD like me.
This strategy relies on financial strength, you want to keep the position under control as a responsible % of account, so that even if VIX went to 200 you could survive.
I’ve never had $1 of realized loss shorting VXX. You can simply look at the chart and verify dum dum, everyone who had the financial strength to hold, won. I post all my shorts here, and everyone knows I never sell until it’s at a nice gain, I’m still holding the last one.
Not complicated, you don’t have to keep posting the same braindead stuff.
Shorted VIX futures (on the Trump tweet “trade war”), already closed that one out for an easy $1K gain in 2hrs. Still got the VXX short bobbing around…
Name the time and place, and put your money down, I’ll be happy to take it. Suggest 3rd party holds $250K from each, when it is seen the report matched my posts, you lose yours. Then I’ll be extra BSD!
I don’t know what that is, and have no motivation to get into that. I make cash in markets, from being right.
The vast majority of my posts are before the fact. I make a point to post here in real-time (see “just shorted vol again!” a dozen times on this thread). Not sure what you are talking about. The fact is, there are these people on every investment forum, that no matter how much info you post on your trades, will claim it never happened. They can’t comprehend that not everyone sucks, but we KNOW there are return-outliers, so why would it be shocking when we meet one online?
