It’s Gonna Be a VXX Halloween
I’ve been buying VXX this afternoon, in between sips of tea and nibbles of crumpets. I intend to drop as much as 10% of assets into VXX or VIX related vehicles. The thought process is only to hedge against my 30% longs. Also, my EXH short position rings in at 5%. In all, I will have 15% downside exposure by the end of the day, with TZA in my personal–cost basis sub $45.
I am not looking for lightening bolts to the face trading action, just something exceedingly scarier than this.
As always, I will utilize my time machine, aka The PPT, for exit points.
My exposure is 15% short, 30% long, 55% cash
34 Responses to It’s Gonna Be a VXX Halloween
http://merchandise.ibankcoin.com/magento/index.php/status-symbols/vxx-immunity-holiday-costume.html
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Your last VXX trade was scary enough.
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But the one before the scary one was sublime, 100% return.
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Man oh man…… what a week…. this could be my best trading week ever…. Where can I ship a case of canned corn so you can throw it on your neighbours lawn?
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SteveTheNeighbor said it had best be kosher corn.
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not a chance…. its going to contain trace ammounts of slaughtered pigs
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http://www.youtube.com/watch?v=EBcflBBGKhE&feature=related
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How soon we forget….a man more motivated than me might surely find any number of missives in your archives where you forever swore off VXX
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vxx is in backwardation, and remains more of a buy than a sell as a result. one really ugly day could send that thing … well up.
folks, being long VXX is, about 80% of the time, retarded, because it suffers from chronic contango. But right now, right here, it suffers from backwardation, meaning going long it makes as much sense NOW as being short it generally does.
that is all
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huh?
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http://www.investopedia.com/articles/07/contango_backwardation.asp
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yup, which is why I’m long VQT (blend of SPY/VXX). also, as I expect the contango to return (eventually), so I’m selling long dated in the money VXX calls, and buying out of the money calls (to limit risk).
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lightning bolts… PLEASE.
I lost enough respect knowing you’re buying a fucked up vehicle like VXX.
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right now, right here, vxx is anti fucked up, fwiw
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TVIX
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With the NYSE Short Interest where it was at when last reported, I don’t think you want to be short anything in this market.
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high or low?
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High, as in near March 09 bottoms high..
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Fitch…that all you got?
Banks are supposed to implode after that downgrade…
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As if a credit rating means shit anymore. puh – leeze
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No joke…they are a farce!
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bought 10 vxx nov call 51 strike… can’t believe i’m listening to fly… shit must be ready to hit the fan…
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buying a derivative of a derivative of a model which tracks a derivative. BEWARE OF CONTANGO, it shall return.
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Oh it’s not a buy and hold, merely for the possibility of action on Monday, I dump it monday either way…
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Beware of coked-out Gorrilas
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I wonder if Fly (or anyone else here) ever does “pairs” trades between leaders and laggards (e.g. long $GOOG & short $YHOO) or “ETF-sectors” long $UUP short $SPY.
Just opening thread on hedge strategies.
So far, I like $SPY & $VIX (why $VXX) hedges.
Thx.
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Yes, often — many people do (i.e., every hedge fund in existence). I suggest researching the VQT ETN if you like SPY and VXX. In simple terms, it holds both SPY and VXX. The ETN rebalances its ratio based on implied and realized volatility, holding 60-97% of the SPY component and 2.5-40% of the VXX component.
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Fly, is your long WNR short EXH a pair trade?
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oh man, first time in a while I find myself positioned fairly opposite you. I will have to make sure I am not insane over the weekend.
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Man, this Shock and Awe that the BoE (bank of England) QE2 really hit me, but all the run up into it tells me a lot of very smart people saw it coming. Anyway, with the not so bad NFP data just confirms my position that the Clam has no power to QE3 me. Copper had a good week, BUT it was LME Metals Week which means all the traders were in black ties, drunk and not working..China closed too. Remember the Top in Copper this year was during China being closed too. I am staying in my Fazmobile..our Govt has no clue how exposed our banks are to the EU mess. And Fly, you know I love your Halloween Costume, I have been wearing mine sine Sept 2010, I believe?
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You should read The Alchemy of Finance.
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I am living it. Soros had such a problem with seeing a bubble and waiting for it to pop. Soros is my Hero. I hope to meet him one day.
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I disagree. In Soros on Soros he explains during the interview that the major difference between him and Rogers was that Rogers thought the prevailing analysts’ conclusions were wrong, but Soros thought they may be wrong. In other words, Soros is flexible and able to admit he is wrong. Rogers does not hold that same train of thought. The key to reflexivity is identifying when the participant’s bias separates from or aligns with their expectations.
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OUCH
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