This sentiment is a common suspicion held by some, and is quite understandable. If you are making lots of money as a trader, why would you bother with side side hustle? Surely must mean that you in fact have no actual trading business and instead are PRIMARILY just a subscription service! I’ll admit that it’s […]
Probably the most common misconception is that UVXY should follow the changes in the VIX index itself, I mean it’s supposed to track vol right? This is so prevalent that ProShares screams this to visitors when arriving at their UVXY page (first paragraph AND a bright banner at the top of the page). You think
UVXY Does not track the VIX Read More »
As a weekly option seller, I am most concerned about the statistics for a Friday to Friday timeframe. A backtest conducted in 2019 (which included 2x leverage from its Oct 2011 inception to the reduced 1.5x leverage starting Feb 2018) quantified the probabilities for selected outcomes that I could use to inform the style of
End Of Week Metrics Read More »
It’s natural to worry about external threats to shorting UVXY outside of VIX spikes causing the price to ramp. What if an organized group kept buying shares or Calls, raising the price and forcing shorts to cover which further adds to the buying pressure? Well, a short squeeze would become apparent when UVXY’s spot price
As a habitual naked Call contract writer in UVXY, I am often asked how I did during the covid market correction in March 2020. I survived, and even profited, here’s the story.My naked Call selling strategy and defending mechanic began during the summer of 2019, and the first test came that December. A Trump tweet
Surviving March 2020 Read More »
VIX and therefore UVXY are inversely correlated to SPX movements, but correlation is rarely perfect. The historical average is a correlation of -.80, or 80% of the time they move in opposite directions. This leaves 20% of trading sessions where they move the same direction, moving up or down together. For traders expecting perfect correlation
Correlation to SPX Read More »
Before registering with the SEC, I would share every UVXY trade I made on Twitter to solicit feedback in hopes of learning more and possibly improving my performance. Most often this would illicit more questions than suggestions and a common one was “have you tried X?”, so here is a breakdown of my strategy history.
UVXY Strategy History Read More »
Pinning is the idea that ‘they’ will attempt to close out a session or expiration at a particular spot price, presumably a high volume option strike so that neither Put nor Call buyers get paid. While this possibility exists for lighter volume underlyings, as liquidity increases, the viability for this to happen gets reduced greatly.
SVXY is a popular choice for those who want a risk defined way to short volatility and retain unlimited upside potential. But just like every other strategy, this risk reduction comes at the cost of reward potential (that darned Captial Markets Theory again) The main problem in choosing SVXY over UVXY or even VXX, is
Most ETPs along with many equities will perform splits to keep the trading price in a range that’s comfortable for traders, few are looking to stick with the no split policy used by BRK.AFor an ever declining underlying like UVXY, this means a reverse split to raise the price back up. UVXY has undergone 10