4 In the past few days a lot of things have been said about this garbage – TVIX.
Firstly I would like to say that in my opinion there is nothing wrong with ETFs,
think of them like mutual funds with low MERs, that is all. They are gaining a lot of popularity among investors and traders since the first Vanguard had come out years ago.
Leveraged ETFs are different and produced as High Beta trading instruments which you can use successfully at
the right time and for day trading or a very short time frame swings.
Now ETNs are the whole different ball game. ETNs DO NOT OWN the underline,
they are very complex structured trading instruments, which I think nobody can REALLY fully understand.
TVIX would be a good example of what can happen when you trade something so complex and retarded by design;
they will disconnect form the benchmark and behave like drunken sailors.
This is not all – since they do not own the underline they are treated like a debt note if provider fails,
yes if CS is in a big trouble tomorrow TVIX CAN go to ZERO.
Please do yourself and your trading account a favour and STAY AWAY.
Happy trading,
Mr.P
4 Responses to “TVIX”
thorium
I always bet on the decrease of a leveraged etf, like I think it’s better to be short ZSL than long AGQ if you are bullish on silver
Mr. Partridge
Interesting you say that as i always belived shorting them should work well, someone I know shorted FAS and FAZ at the same time a few years back and claim to make $$ on both trades, I have never tried it myself.
Something curious to note: many traders claim to short TVIX, but at the same time I know there was no borrow at the time lol
leftcoasttrader
I used to only short inverse ETF’s whenever I wanted to go long, but eventually realized you’re just picking up pennies in front of a steam roller. It works as long as you can stay solvent.
Throw a small 2% of your assets into shorting TVIX in July 2011 and enjoy the 900% draw down and all the forced liquidations that come with it.
Sounds fun.
Tom
I believe it’s underlying, not underline.