Posted by bluezango on 14th of Jul 2016 at 10:07 am
Any alternative way to play VIX long when it bottoms on
support? Yes, weird VIX is up and market up (As Matt said,
traders must be buying VIX to hedge), and even weirder that VXX is
down, as it is supposed to track VIX. I plan to buy VXX when
VIX hits rock bottom support at 12.54-12.74. I wish there were a
better more pure play to buy VIX. VXX chart shows so
much futures rollover and degradation (just goes down continually
over time), that I do not trust the VXX much anymore, accept for a
2-3 day trade. Ideas?
Posted by bluezango on 15th of Jul 2016 at 04:50 pm
New lows today in VIX below 12.50 range to 12.36. I did
this: When VIX is 12.36-12.74, I scale in to VXX at 11.56-11.67,
then scale out of VXX 11.95-12.06, so I do not hold over weekend 2
days.
It is only 30 cents, but 3% is 3% a few times, I am happy.
It just "feels" and seems that of all other stocks, ETF, and
indexes, the VIX is different, in that it has a solid
"floor". Sure, it can maybe go down a bit below 12.36, but
seems like all upside. I am wrong here?
Posted by bluezango on 18th of Jul 2016 at 11:04 am
wow! VXX Low. Just hit a 52week low 11.49 No, no
paper trade data or back testing. I am using a 1% stop for a 3-4-5%
target upside. No, to subjective (Steve), or trigger (Matt)
basis. My assumption for downside risk scenario: doji, doji,
doji, etc.. and S&P just goes up 6 points at day consistently.
(calm and slightly up indefintitely, while the VXX decomposes
slowly.
Interesting: The table below shows
VIXlevels with the expected
volatility in the S&P 500 on a monthly or daily basis. Keep in
mind that we are talking about volatility, not the expected return
or change.
On weekly time frame $VIX is still far from oversold and on
daily is still not too oversold. Pay more attention to S&P
index which will exercise its power on $VIX. Matt mentioned in
yesterday's letter S&P500 looks boooolish and even if corrects
a little bit mostly by time than price this might not affect
volatility. Also people are often buying puts to hedge what
basically means they are buying insurance wishing to loose on it -
but puts they buy show up on puts/calls ratios and will affect
volatility numbers without much of the reason. On my chart
volatility can easily go in $11.20-11.40. And breakout can be also
down and not up.
Any of you who is thinking about trading VXX: without all the
rollbacks and rollovers and flipovers VXX would be around $7500.
Perfect tool to destroy portfolio if you are not very, very
careful.
I trade HVU.TO and UVXY - both are 2X Volatility Bull. Would't
keep them longer than few days. Better way is wait out
volatility uptrend and get Inverse Volatility TFS (HVI.TO SVXY). I
kept these for months. Check the charts and you can see you could
double your money last year more than once and once for this year.
No resigning CEOs, no accounting problems, no legal issues. Just
pure trend you can watch on chart and do nothing.
Posted by frtaylor on 14th of Jul 2016 at 03:45 pm
With you on the SVXY thing. I need to develop a plan for trading
it long term, however. There are some good ideas on the web, but
haven't verified them for myself.
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Any alternative way to play
VIX 60 min comments
Posted by bluezango on 14th of Jul 2016 at 10:07 am
Any alternative way to play VIX long when it bottoms on support? Yes, weird VIX is up and market up (As Matt said, traders must be buying VIX to hedge), and even weirder that VXX is down, as it is supposed to track VIX. I plan to buy VXX when VIX hits rock bottom support at 12.54-12.74. I wish there were a better more pure play to buy VIX. VXX chart shows so much futures rollover and degradation (just goes down continually over time), that I do not trust the VXX much anymore, accept for a 2-3 day trade. Ideas?
As expected, VIX hit 12.74
Posted by bluezango on 14th of Jul 2016 at 01:18 pm
As expected, VIX hit 12.74 and then took off. I bought VXX, up .82% already.
Results on short term VIX Long Plays
Posted by bluezango on 15th of Jul 2016 at 04:50 pm
New lows today in VIX below 12.50 range to 12.36. I did this: When VIX is 12.36-12.74, I scale in to VXX at 11.56-11.67, then scale out of VXX 11.95-12.06, so I do not hold over weekend 2 days.
It is only 30 cents, but 3% is 3% a few times, I am happy.
It just "feels" and seems that of all other stocks, ETF, and indexes, the VIX is different, in that it has a solid "floor". Sure, it can maybe go down a bit below 12.36, but seems like all upside. I am wrong here?
bluezango, it looks like a
Posted by frtaylor on 15th of Jul 2016 at 05:21 pm
bluezango, it looks like a solid trade idea. Do you have paper traded data to support? What, if any, is your stop? Also, I pm'd you on another topic.
wow! VXX Low. Just hit
Posted by bluezango on 18th of Jul 2016 at 11:04 am
wow! VXX Low. Just hit a 52week low 11.49 No, no paper trade data or back testing. I am using a 1% stop for a 3-4-5% target upside. No, to subjective (Steve), or trigger (Matt) basis. My assumption for downside risk scenario: doji, doji, doji, etc.. and S&P just goes up 6 points at day consistently. (calm and slightly up indefintitely, while the VXX decomposes slowly.
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:volatility_index
Interesting: The table below shows VIXlevels with the expected volatility in the S&P 500 on a monthly or daily basis. Keep in mind that we are talking about volatility, not the expected return or change.
On weekly time frame $VIX
Posted by mulisko on 18th of Jul 2016 at 11:36 am
On weekly time frame $VIX is still far from oversold and on daily is still not too oversold. Pay more attention to S&P index which will exercise its power on $VIX. Matt mentioned in yesterday's letter S&P500 looks boooolish and even if corrects a little bit mostly by time than price this might not affect volatility. Also people are often buying puts to hedge what basically means they are buying insurance wishing to loose on it - but puts they buy show up on puts/calls ratios and will affect volatility numbers without much of the reason. On my chart volatility can easily go in $11.20-11.40. And breakout can be also down and not up.
Yep, stopped out on VXX.
Posted by bluezango on 18th of Jul 2016 at 02:23 pm
Yep, stopped out on VXX. Boy is it quiet and "non-volatile" :) VIX at 12.44% and VXX at 11.42
Any of you who is
Posted by mulisko on 18th of Jul 2016 at 04:29 pm
Any of you who is thinking about trading VXX: without all the rollbacks and rollovers and flipovers VXX would be around $7500. Perfect tool to destroy portfolio if you are not very, very careful.
I've actually been holding a
Posted by frtaylor on 19th of Jul 2016 at 10:58 am
I've actually been holding a small position in SVXY in my IRA. Doing very well, and with the SPX breakout I may buy more on any pullback to support.
let us know how you
Posted by mulisko on 14th of Jul 2016 at 02:02 pm
let us know how you did by the end of the day. I'm still holding Inverse Volatility which is up by 0.75%
oh yeah the VIX ETF's,
Posted by matt on 14th of Jul 2016 at 10:12 am
oh yeah the VIX ETF's, at most I day trade those, they don't move well with the VIX. Best to play VIX futures but I have never traded them.
I trade HVU.TO and UVXY
Posted by mulisko on 14th of Jul 2016 at 12:19 pm
I trade HVU.TO and UVXY - both are 2X Volatility Bull. Would't keep them longer than few days. Better way is wait out volatility uptrend and get Inverse Volatility TFS (HVI.TO SVXY). I kept these for months. Check the charts and you can see you could double your money last year more than once and once for this year. No resigning CEOs, no accounting problems, no legal issues. Just pure trend you can watch on chart and do nothing.
With you on the SVXY
Posted by frtaylor on 14th of Jul 2016 at 03:45 pm
With you on the SVXY thing. I need to develop a plan for trading it long term, however. There are some good ideas on the web, but haven't verified them for myself.