How many times have you seen a trader predict that UVXY will go to $100, $500, or $1,000, no matter where is current price is or where VIX stands? As UVXY is a pure math equation, with a couple of assumptions, one can quickly calculate where its top might be. The first thing we need […]
How High can UVXY Go? Read More »
Gambler’s fallacy is the contention or belief that a string of results that are outside the expected will influence the next result. As a coin flip count increases, so do the results get closer to 50/50. After seeing ‘heads’ 5 times in a row, what are the chance that ‘tails’ will show up next? Sorry,
Knowing the theta decay and other market measures look at every day of the week including weekends, an opportunistic trader might conclude that the ideal theta to collect would be when nothing trades. Unfortunately everyone else knows that there is a weekend ahead and adjusts formulas accordingly. The most common method used in dealing with
The Weekend Effect Read More »
So you have a long dated spread on, have used a large portion of capital in your margin account and a super-wide B/A spread or low liquidity mark is reducing your net liq and using up too much margin. You can plainly see by looking at nearby strikes that yours is mis-marked, but your broker
Bid Ask Manipulation Read More »
It is human nature equate a dollar figure with something relatable in your experience; my cable bill is $100, my rent is $1,500, and $30,000 is how much I make per year cooking fries at McDonald’s. So it is very easy to look at your profit and loss and say to yourself; “I just made
Moving the Decimal Point Read More »
“What if I get assigned on my short UVXY Calls?” is a common concern for options writers. Let’s look at the risks and realities of option rights. First the mechanics. Sold Calls represent a short bias and upon assignment, you will have -100 (short) shares per contract assigned. Sold Puts represent a long bias and
Exercise and Assignment Read More »
UVXY has weekly, monthly, and LEAPS options released on the following schedule New option expirations are added on Thursdays to replace the contract expiring the on next day. There are 5 weekly contracts, with a 6th available on Thursday and Friday when that Friday’s expiring contract is also a weekly. New monthly expirations are added
Option Expiration Schedule Read More »
Even a casual observer of UVXY’s option chain will notice the disparity in extrinsic values between strikes DOTM and DITM. It is well known that for indexes and most other symbols with options, that the Put side will carry larger premiums than the Call side. This is in respect of the old adage of “The
First a little glossary; ETP stands for Exchange Traded Product which usually refers to anything that can be traded, typically instruments managed by issuers but could technically include equities and commodities. ETF stands for Exchange Traded Fund. These are regulated instruments that must be backed with the underlyings, or something equating them, that they track.
Often I see traders look at UVXY’s or other vol tickers’ inflows to highlight the obvious ‘accumulation’ phase that indicates price support and higher prices. What they typically fail to account for is the change in spot price over their chosen measurement period. UVXY is an ever declining ticker with brief, and violent, spikes to
Derivative Inflows Read More »