Know Your Underlying!
For almost a decade now I have studied how VIX futures based ETPs perform and have shared this extensively on Twitter and through private coaching sessions. Here you will find long form answers to misconceptions and questions I have been asked time and again.
What is UVXY?
UVXY is an exchange traded product from ProShares that is based purely on a calculation, which unlike other traded underlyings is not affected by direct supply and demand forces.
UVXY’s price is governed by a single effect; the percent change in a combination of front and second month VX futures on a daily basis. It’s unlike other free-floating underlyings where supply and demand forces are satisfied by the increase or decrease in price until those forces equalized.
VX futures are the market’s expression of where it believes the VIX index will close at expiration of each futures contract. Supply and demand is a factor here though VX MUST respect the movements of VIX, so in that respect, supply and demand forces on VX are constrained.
What the X is happening here?
I’ve promised the UVXY.pro site to Twitter followers since 2015 and it only took me 7 years to get it running. Before passing the Series 65 and becoming licensed, I was able to share almost every trade opened the day they were placed. This prompted many discussions about my strategies and how I managed them. By far the most common questions are “How did you do during the 2020 covid spike?”, “How can you hedge a naked UVXY Call?,” and “My broker has no UVXY shares available to borrow.”
Want to work with Dorgeolis?
For those wishing to take advantage of my strategies without having to implement and manage it themselves, Dorgeolis Capital is now accepting investment capital from Qualified Purchasers. I also offer one-on-one, week-long on-site coaching for those who wish to learn these methods in depth and use them for portfolio management.