Misconceptions, mistakes and noobs

Short Squeeze

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

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Pinning UVXY

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.

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Market Makers

A favorite boogieman to many traders, Market Makers are an indispensable ingredient that ensures liquidity, without which we’d not enjoy the fills we get each day. One of my early strategies involved selling vertical Call spreads on the opening day of a new weekly option expiration. Often I’d be the only volume on that series.

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